The Office of the Comptroller of Puerto Rico issues a qualified opinion on the fiscal operations of the Electric Power Authority related to the fuel purchasing process and payments for professional services. A qualified opinion is issued when the noncompliances individually or together are significant but not pervasive.
The Report reveals that in eight contracts and one amendment for the purchase of fuel between 2008 and 2012 for the sum of $4,600 million, PREPA did not include in the contracts the clause to impose the interest charge for delay. Despite the absence of this clause in the contracts, the Authority disbursed $3,247,376 to the providers. In addition, contrary to the Interest Payment Procedure of 1996 and other regulations in effect, the treasurer of the Electric Power Authority could not supply for the examination of our auditors the reports and investigations carried out on the payments of charges for delay.
The three-finding audit notes that payments of $2,300 million were made to a company that had pleaded guilty to fraud in the federal forum in 2006. This situation, contrary to Act 458-2000 to Establish the Prohibition of Awarding a Bid or Contract to Persons Convicted of Crimes Constituting Fraud, Embezzlement or Illegal Appropriation of Public Funds, was carried out through the transfer of funds to third parties at the provider's request. This assignment of funds is regulated by the Procedure for Processing the Assignments of Funds approved in 2002. However, the directors of Finance and the treasurers of the Authority did not confirm the sworn statement of the provider.
From 2009 to 2017, PREPA made disbursements for $2,700 million to 29 contractors to recognize and pay debt for services rendered without a contract. This situation, contrary to the law in effect, fosters the presentation of fraudulent and illegal claims and the making of payments for services not rendered.
The Report comments that a fuel provider was identified that filed and paid its Monthly Excise Tax Return to the Department of the Treasury more than two years after the term set by the Act.
The Report covers the period from January 1, 2011 to September 15, 2017.
See Audit Report CP-19-01.
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