Puerto Rico

Congress has provided $1.5 million to the three major Puerto Rican political parties to help them participate in the legislative process involving the future political status of Puerto Rico. The political parties generally used grant funds for authorized purposes. While GAO found minor exceptions, such as payment of some unallowable entertainment expenses, these amounts were not material, and action has been taken to recover the funds. GAO also identified some questionable grant administration procedures by the political parties. For instance, some expenditures paid differed from those approved for payment by the grant officer. The expenditures paid, nonetheless, were for allowable costs. In addition, one party created a significant cash reserve for possible disallowed costs but did not deposit the funds in an interest-bearing account.

GAO found that: (1) by June 1991, the three parties had expended about 82 percent of their obligated grant funds; (2) the three parties generally used expended funds for authorized activities as specified in the legislation and grant agreement; (3) the Popular Democratic Party and the New Progressive Party spent most of their funds on consulting services, while the Puerto Rican Independence Party spent its funds on research products; (4) although some expenditures paid differed from those payments that the Executive Office of the President, Office of Administration (EOPOA) approved, they were allowable costs; (5) the parties paid for some unallowable entertainment expenses; (6) although the entertainment expenses did not involve significant amounts, EOPOA took actions to recover those funds; (7) the Popular Democratic Party made partial payments on invoices to create a reserve for possible disallowed costs but did not deposit the funds in an interest-bearing account, as required; and (8) the New Progressive Party paid some vendors more than EOPOA authorized and made payments to other vendors on unauthorized invoices.