Op-Ed: Puerto Rico’s pervasive incompetence with federal funding
A few weeks ago, Jenniffer González-Colón, Puerto Rico’s Resident Commissioner, appeared in the highly rated show translated as “Playing Hardball,” along with Manuel Laboy, Secretary of the Department of Economic Development.
The show’s panel inquired about the government’s slow disbursement of federal funding that was allotted to the island under several of the Cares Act programs, particularly the situation regarding an award of $2.2 billion.
Without going into the specifics, González adequately summarized the areas that the Government of the Commonwealth of Puerto Rico must accomplish to move these much-needed investments. What was obvious, without uttering a word, was that Laboy did not have any eloquent words to demonstrate that he understood the topic. In other words, he was awestruck.
My interpretation of this television incident is to demonstrate that at the center of our current ills, is the pervasive incompetence of government personnel to adequately manage the intricacies of federal grant funding. And that conclusion is not only mine; those were the first words by panelist/journalist Margarita Aponte during the show.
We must first make the exception that in the current stalemate, both sides share much of the blame. Nonetheless, enhancing the capacity of local public officials to manage the awarded grants has become a matter of utmost importance for the future of this island. And this imperative is not new.
Back in 2011, the Obama Administration’s Task Force report on Puerto Rico indicated that: …significant amounts of federal funds available to the Island are not being spent in a timely fashion. In particular, shortcomings in tracking and processing systems, as well as accounting practices, have hindered the Island’s use of federal funds. This is a problem, in part, because transitions in political leadership in Puerto Rico often result in significant turnover among agency staff — including among the professionals who understand program requirements and are responsible for implementing them effectively. This limited capacity results in Federal resources going unspent despite significant need and in the return of critical resources to federal agencies.
The conclusions of the above report have been revisited throughout many other interventions made by the federal government, particularly indicating local entities lack of internal controls, absence of grant management culture, deficiency of planning and not following policies and procedures.
For example, in 2018 the University of Puerto Rico settled a case returning $1.7 million to the National Science Foundation and the Department of Energy where the UPR did not comply with the time and effort reporting requirements of salaries and wages to ensure that payroll for the various grants was correctly and appropriately charged for the 2011 calendar year.
The two most recent examples underperformance were published by the Department of Homeland Security’s Inspector General (OIG) regarding the Puerto Rico’s Education Department and the Housing Department lack of capacity handling Hurricane María Disaster funding. The report for the Housing Department summarized that:
The Housing Department’s internal controls over payroll need improvement to ensure compliance with policies and procedures for adequate review of timesheets, including required signatures, certification of hours, and certification of completeness before submitting to FEMA for reimbursement.
The report for the Education Department was more penetrating signifying that:
The Education Department does not have the capacity to effectively manage Federal Emergency Management Agency PA grant funds according to federal regulations and FEMA guidelines. During the period covered by our audit, the Education Department did not have adequate expertise to complete its emergency work and submit timely requests for reimbursement.
Therefore, at this critical juncture the current administration, and the next one, cannot afford to mismanage federal funds as they have become a lifeline for the most vulnerable public services. The state and local government must prioritize their performance in using the current funds they already have. Put aside any effort to compete for new programs if you cannot properly manage what you have.
It is also important to make use of the resources you have available to gradually improve performance. Knowing how the polarized politics work in Puerto Rico, the current administration just forgot to use the federal funds management website created by former Gov. Alejandro García-Padilla’s administration under the Office of Management and Budget (OGP) found here. The website has a full grant funds management policy manual that could facilitate each agencies procedures.
Much of the problems with managing federal funding could have been resolved by adopting at least one of the recommendations of the Obama Task Force. They suggested that:
First, the Task Force proposes to consult with the Puerto Rico government to increase capacity in its civil service, particularly in the areas of grant and program management. Municipal workers also should be included in this effort because many municipalities can apply directly for Federal grants. Based on the results of the consultation, representatives of key Federal agencies should work with officials from Puerto Rico to identify an institution or training program, similar to the Presidential Management Fellowship or Senior Executive Service, that would provide the necessary skills to future professional civil servants. Other city and State governments have created similar programs, which could be examined to determine the best approach for Puerto Rico.
To aid in the development of this civil workforce, Puerto Rico could use options available under the Intergovernmental Personnel Act to tap experienced Federal workers to work in Puerto Rico on temporary assignments, or to send select government workers from the Island to Federal agencies to receive hands-on training with Federal programs.
It is imperative to train and develop employees and managers in the grants lifecycle. Being proficient in what has become a complex discipline is achieved in the workplace and takes many years to master.
State agencies and municipalities cannot depend exclusively on external companies paying them million-dollar contracts, blessed with only political clout. The public official and the head of the agency cannot depend on a parasitic relationship with an external entity, to avoid their responsibility before the federal government. The government employee is the one who formally represents the agency and who accepts the public policy contained in the grant award; and he or she bears the brunt of the consequences for bad administrative decisions.
The responsibility of all of us as external consultants is to consult, assist, advise, train and transfer knowledge to our public and nonprofit sector clients, but above all is to sermonize the importance of them taking reasonable care with the funds they get.