The Office of the Comptroller of Puerto Rico issues a partially adverse opinion on the fiscal operations related to budget administration, disbursements, the construction of permanent works and improvements, collections, and some controls and procedures of the Municipality of Yauco.
The Report reveals that Yauco had accumulated deficits in the Operational Fund of $4.5 million for fiscal year 2014 (32% of the budget) and $5.7 million for 2015 (42% of the budget). In addition, the bank holding the Municipality's funds charged $116,104 due to checks paid with insufficient funds, overdraft financing, returned checks, and others. Operating with a deficit reduces the available resources, and the charges for overdrafts and insufficiency in bank accounts also reduce the economic resources to provide services to the community.
The nine-finding audit points out that the cost of the rehabilitation of the former Diagnostic and Treatment Center was split into two contracts for $100 thousand and $133 thousand, with the same contractor, to avoid the public bid required for works exceeding $200 thousand. In addition, the then-Mayor formalized five contracts for $406,940 for five construction works without obtaining quotes from at least three suppliers as provided by Act 81-1991, Autonomous Municipalities Act. These situations prevent free competition among bidders and prevent the Municipality from having alternatives to select the best offers.
The Municipality carried out two bridge construction projects, one over the Loco River and the other in the Albarrán sector, without obtaining the permits from the Permit Management Office. Also, contrary to Act 81-1991, the Finance director of Yauco did not encumber the credits until 435 days after the granting of three contracts and two amendments for permanent improvements for $2.4 million.
Our auditors identified that the Municipality made payments without invoices, did not maintain a perpetual inventory of the materials in the warehouses or of the blank checks. In addition, the Audit Affairs Commission of the Legislature did not comply with its oversight function since, as of April 2015, it had not evaluated seven internal audit reports, two federal program monitoring reports, and two reports of the audited financial statements issued by the Municipality's external auditors.
The Report covers the period from January 1, 2013 to December 31, 2015.
See Audit Report M-17-41
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