The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Luquillo. A qualified opinion is issued when noncompliances, individually or in the aggregate, are significant but not pervasive.
The Report reveals that the Municipality did not obtain the construction permits for works, from the Permit Management Office (OGPe), for the repair and improvements of the street and the wall of Herminio Díaz Navarro Avenue at a cost of $111,950. In addition, for the rehabilitation of the “La Pared” Boardwalk it obtained the permit 9 months after starting the work.
The municipal officials did not deliver the final –as built– plans of the aforementioned projects or of the remodeling of the Arts and Culture Center Theater. For the remodeling of the Theater, they also did not deliver the reports of the 32 daily inspections or the minutes of 20 meetings on the project's progress. These situations did not allow the OGPe to exercise its oversight function and prevented our auditors from verifying the correctness of the procedures, a fact that fosters the commission of irregularities.
The three-finding audit notes deficiencies in the contracting processes for works and in the payments made. For example, an advisor contracted by the Municipality solicited and received the proposals of seven companies for the repair of the air conditioning system of City Hall, without being authorized. In addition, the director of purchasing awarded painting work at City Hall to a company whose bid was more expensive. This official did not document the reasons for accepting a more costly bid nor did he formalize an official contract but rather a service contract without the clauses required by Law.
The Bid Board also awarded an informal bid to a more expensive offer to repair the wall and Díaz Navarro Avenue in Luquillo. The Board argued that the most economical bid was rejected because the bidder presented it as a lump sum (lump sum) and not as a breakdown of costs. That argument was not a requirement for the award of the work.
Contrary to the Regulation for Municipal Administration, the budgetary appropriations necessary for the payment of three contracts and four amendments for $257,807 were not encumbered. This situation prevents maintaining effective control of the budget items and may foster unnecessary litigation.
The Report covers the period from January 1, 2014 to June 30, 2017.
See the Audit Report M-19-33.
To see other published reports, visit our Audit Reports section.
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