The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Caguas Judicial Region of the General Court of Justice. A qualified opinion is issued when noncompliances, individually or in the aggregate, are significant but not pervasive.
The Report reveals that the Office of Courts Administration (OAT) has been paying, since 2013, $5.4 million annually in excess for the rent of the parking facility of the Caguas Judicial Center. As of January 31, 2018, it had paid $22.4 million in excess of the reasonable rent, and if this situation persists, it would be paying $180.3 million by the end of the contract signed for 30 years.
Contrary to the law and to sound administration standards, the director of the OAT formalized the lease contract on May 27, 2011, in which a lease rate was set per square foot instead of by the number of parking spaces, as is customary and usual in the real estate market. As a result, in the Caguas Judicial Region $384 is being paid monthly per parking space, far above the comparable rates of approximately $40 to $50 paid in Caguas and between $75 and $85 monthly paid in the prime areas of Hato Rey.
This examination was validated by an expert civil engineer and professional appraiser contracted by the Office of the Comptroller. In addition, the expert contracted by the OAT itself in 2011 to evaluate lease costs concluded that the standard for setting space rental is obtained on the basis of the number of parking spaces and not by the square footage of the building.
The single-finding Report recommends that the Secretary of Justice consider these situations and take the appropriate measures, and that the administrative director of the courts renegotiate the lease rate of the parking facility. Similar situations had already been noted in audit reports DA-12-52 and DA-12-53 of March 19, 2012.
The audit also comments that the OAT's decision to build a facility for the Caguas Judicial Center and the region's courts increased the Judicial Region's expenses from $747,399 to $17.6 million annually. The payment of rent for the next 30 years of the contract will total approximately $582.9 million. In addition, as of January 31, 2018, the cafeteria, the gym, and 473 parking spaces for employees had not been used (see photos in Exhibit 5 of the Report).
Projects of this magnitude that commit present and future budgets can represent a financial burden in times of fiscal crisis. Since 2006, more than six laws have been enacted declaring the Government of Puerto Rico in a state of fiscal emergency.
It is striking that such high amounts are paid for the goods the government acquires. We must make sure to maximize every cent that citizens contribute for the benefit of our people. This second and final report covers the period from January 1, 2012 to January 31, 2018 .
See the Audit Report DA-19-20.
To see other published reports, visit our Audit Reports section.
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