The Office of the Comptroller of Puerto Rico issues a partially adverse opinion on the contracting of professional and consulting services in the Municipality of Cataño.
The Report reveals the contracting of five regular corporations that provided legal, medical-hospital, engineering and air conditioner maintenance services for $12.8 million from March 2009 to April 2013, contrary to the legal framework. These services could only be offered through the legal figure of a professional corporation.
In addition, contrary to Act 81-1991 on Autonomous Municipalities and to the formalized contracts, three of the mentioned corporations subcontracted the services. For example, the two medical-hospital corporations subcontracted the administrator, the physicians, the laboratory and x-ray technicians and the billing. The president of the engineering corporation, who did not have the required licenses, also subcontracted an engineer and evaluators who performed the services since the corporation had no employees.
These situations were referred to the Secretary of Justice, to the President of the Examining Board of Engineers and Surveyors of Puerto Rico, to the President of the College of Engineers and Surveyors of Puerto Rico, to the President of the Examining Board of Refrigeration and Air Conditioning Technicians, and to the Secretary of State on July 28 and August 24, 2017, for the corresponding actions.
The three-finding audit also points out that the Municipality made an illegal payment of $205,000 to one of the medical-hospital corporations since it provided services without a written contract having been formalized. In addition, contrary to Act 237-2004 on the establishment of uniform parameters in the processes of contracting professional and consulting services, the engineering services contract was formalized with a term longer than the 12 consecutive months allowed by law.
Our auditors identified that six contracts and three amendments were not submitted for the approval of the Municipal Legislature, which prevented it from fulfilling its responsibility to authorize the contracting. A similar situation had already been pointed out in Report M-13-10 of 2012.
As of December 31, 2014, Cataño had 15 civil lawsuits for $25 million pending resolution in the courts and as of December 31, 2015, the Municipality had not recovered $713,322 recommended in audit reports M-09-28, M-09-36 and M-10-13.
The Report covers the period from January 1, 2010, to December 31, 2014.
See Audit Report M-18-11
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