editorial (horizontal-x3)

Transparent oversight of the use of public resources is an essential tool for building up the reliability that Puerto Rico needs to show the US government, especially regarding federal reconstruction funds.

The review of contracts is a core objective of the public audit exercise. The Office of the Comptroller - which powers arise from the Constitution - is the government agency with the most resources to conduct formal audits, aimed at promoting the efficient and honest use of the people's money.

It is crucial that Comptroller Yesmin Valdivieso clarifies the criteria and procedures that led her Office to conclude that there was no irregularities in the selection of Whitefish Energy Holdings for the first repairs of the Puerto Rican power grid that was severely damaged by hurricane Maria.

She has to explain why –contrary to the usual procedure- the audit report on Whitefish was not published. The audit report must include the extent of the work carried out, and in no way can it be replaced by a press release. The absence of a record document feeds a suspicion that should not exist in an entity that oversees government disbursements.

Whitefish was selected expeditiously by the Electric Power Authority to carry out emergency works. Its $300 million contract was revoked after a barrage of criticism in Puerto Rico and the mainland. These included the hiring of a company that had only two employees and that the Puerto Rican government would not have counted on the expertise of US electric power companies.

Those early questions put the management of funds by state authorities in the eyes of the federal government. Its implications affect the present. This is shown by the statements made by FEMA’s Deputy Federal Coordinating Officer on the island, Justo Hernández, regarding the evidence that the government must submit prior to the reimbursement of nearly $28 million.

The reputation of the island’s government is precarious; it needs to be strengthened. It is up to every agency and public corporation to show that they can cope with the recovery task for which they requested $139 billion from the White House and Congress.

It is necessary to guarantee clear methodologies for the selection of contractors and the evaluation of their performance. The audit is an instrument to detect actions that require corrections. A crucial objective is to avoid the repetition of costly errors for public coffers and, therefore, for taxpayers. 

In the specific case of Whitefish, key aspects –if any- of the evaluation process still remain to be clarified, for example, what led to the selection of an inexperienced company to deal with an emergency of the magnitude of the collapse of the power grid on the island, when there were other options available.

Aspects such as the financial capacity of the Montana company, its background and tools to offer the service, also remain unanswered, given that it only had two employees at the time of hiring. Another question concerns the scale of prices agreed between the Montana-based company and PREPA for the payment of the salaries of employees.

It must also be explained why the contract was cancelled if, as the Comptroller's Office concludes, it complied with all the provisions required by law and regulations.

The reconstruction of Puerto Rico requires transparent processes for contracts and for the disbursement of public funds. Puerto Rico is waiting for $1.5 billion through the Community Development Block Grant program and facing the challenge of establishing parameters for its efficient use. Appropriate auditing provides the final guarantee.


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