The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Dorado. A qualified opinion is issued when the instances of noncompliance, individually or together, are significant but not pervasive.
The Report revealed that the Municipality authorized six purchase orders for $671,409 against two contracts obtained through bids, on projects that were not included in the bids. The construction of the Front Plaza and phases II and III of the improvements to the ball park of Barrio Higuillar were not included among the awarded works, and therefore a public bid was required for these works.
In addition, contrary to the law and regulations in force, the Municipality split the project to upgrade the electrical system of the Emergency Management Center, with the purpose of avoiding exceeding the $200 thousand limit set by law, and thus evade the bidding procedure. These situations, which impede free competition, are attributed to the fact that the Mayor and the Bidding Board departed from the legal and regulatory provisions.
In Finding three, it is noted that the Municipality made improper payments of $119,138 due to incorrect claims in the change orders and for work not performed by the contractors. For example, four areas of the aforementioned ball park were identified in which no work was performed, nor were works included in the contracts performed, such as fences or concrete sidewalks.
The Finance director certified that Dorado maintained $635,069 in accounts receivable for municipal license taxes. The examination performed observed that the license tax register had accounts overdue for more than five years and the information was not up to date, nor was it reliable.
In addition, the delay in bank reconciliations caused 111 unauthorized debits of $12,905 to be made from the Municipality's checking account for payments of telephone, car, cable, electric power, and water. Regarding these events, the Municipality had not carried out internal investigations to ascertain the causes, had not referred the situation to the Department of Justice, nor had it notified the Office of the Comptroller. Following a meeting with our auditors, after a year and a half from the accounting notification of this situation to its supervisors, the Municipality filed a complaint with the Puerto Rico Police, which was investigated by the Criminal Investigations Corps of Vega Baja, who identified a person unrelated to the Municipality as the one responsible for the unauthorized debits.
The Report notes that $5.1 million was invested in projects that have had no use. The Municipality contracted the design of plans, consultations, permits, and purchased three lots from the Puerto Rico Industrial Development Company for the construction of the new Municipal Coliseum, the Front Plaza and ornamental fountain, the Parking Tower, and the Convention Center (see photos in Appendix 2 of the Report).
This report, the second and last of the Municipality of Dorado, covers the period from January 1, 2013, to June 30, 2017.
See the Audit Report M-19-38.
To see other published reports, visit our Audit Reports section.
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