Federal board: Puerto Rico paid $28M to non-workers

SAN JUAN, Puerto Rico — A federal control board revealed Friday that the U.S. territory paid more than $28 million in salaries in recent months to people who no longer work for the U.S. territory’s Education Department, even after officials last year flagged the practice as a problem.

The announcement came during a meeting of the federal control board that oversees Puerto Rico’s finances as the U.S. territory government undergoes a bankruptcy-like process.

“This is total outrage,” said board member Antonio

Medina. “It’s the worst kind of corruption. It’s stealing the future of our children.”

The board first flagged the problem in late September, announcing it had contacted federal and local law enforcement agencies after discovering the Education Department paid more than $84 million in salaries to some 17,500 people from 2007 to 2020 who no longer worked there.

The board said the department failed to meet its requirement to implement a time and attendance system by mid-December.

“I don’t feel surprised,” said board member Andrew Biggs. “After four years of observing the government of Puerto Rico in action, this doesn’t shock me at all.”

He noted that the government years ago had invested $33 million in a time and attendance software system that was never implemented, leading to the loss of more than $84 million over more than a decade. The department has $1.36 billion allocated in fiscal year 2021, and the board called for the budget to be cut if the more than $28 million is not recovered.

Puerto Rico Gov. Pedro Pierluisi, who assumed office earlier this month and is the first governor to sit in on such meetings, said he was not aware of the recent payments. He pledged that implementing a time and attendance system will be a priority.

“They’ll have to pay one way or another,” he said. “Rest assured that we’ll deal with this.”

Puerto Rico continues to restructure a portion of its more than $70 billion public debt load, accumulated from decades of unchecked borrowing of millions of dollars to cover ballooning deficits.

In 2015, the U.S. territory announced it was unable to pay its public debt. Two years later, it filed for the biggest U.S. municipal bankruptcy in history.