The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Coamo. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant but not pervasive.
The Report reveals that the Municipality did not request quotations from three representative market suppliers from 2017 to 2018, in contracts selected for electrical improvements and installation of windows and doors, of the project for the conversion of the Coamo Velodrome to a soccer field. The project had a total cost of $811,499 and was carried out through the formalization of 16 contracts and 27 amendments.
The four-finding audit notes that an engineering firm requested and received the quotations, instead of municipal employees, to acquire lighting poles, artificial turf equipment, and bathroom accessories, among others. This situation could detract from the reliability of the processes and fosters favoritism and the commission of irregularities.
The Comptroller's auditors found that the Municipality disbursed $2,362 for bathroom equipment not installed in the Velodrome improvement project. A special aide and the mayor had signed the three payment certifications of the contractor for the work performed. The special aide also certified that the work had been performed as stipulated in the contracting for $26,846, and the mayor accepted the project. The Report recommends that the $2,362 for equipment not installed be recovered from the contractor.
In fact, the Report comments that, as of March 21, 2019, the Municipality had not recovered $185,076 recommended in Audit Report M-17-40 of June 1, 2017.
Contrary to Act 81-199 on Autonomous Municipalities and to the contractual clauses, the officials did not locate the bonds or the public liability policies of four contracts and four amendments of the Velodrome project, and for two contracts it was not required that these provide the bonds to guarantee the payment of labor. Municipalities cannot enter into contracts to carry out public works and improvements until the contractors provide evidence of the delivery of a bond to guarantee the payment of labor, equipment, and materials (payment bond), and compliance with the contract (performance bond).
The auditors identified that the budgetary appropriations for the payment of two contracts and one amendment totaling $77,857 were not obligated until two months later. A similar situation was commented on in Audit Report M-17-40.
The Report comments that the Municipality kept 32 employees, 46%, as transitory employees for up to eight years, in excess of the one-year term established by law. In addition, the municipality had 10 civil lawsuits for $1,864,606 pending resolution by the courts.
The audit recommends that the Office of Management and Budget ensure that the Municipality complies with the Corrective Action Plan established by the Office of the Comptroller of Puerto Rico.
This first Report of Coamo covers the period from July 1, 2016 to June 30, 2019.
See the Audit Report M-21-21.
To view other published reports, visit our Audit Reports section.
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