The Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Rincón. A qualified opinion is issued when the individual or combined noncompliances are significant, but not pervasive.
The Report reveals that the bidder of the bids awarded for the acquisition of gasoline and diesel did not comply with the conditions, specifications, and general instructions to invoice its profit margin at the wholesale price. For the supply of gasoline, the bidder invoiced 9% above the profit established by a retailer in the pump price, and for diesel, 7% above the fixed profit based on the price of the Department of Consumer Affairs.
These situations undermine the reliability of the bid awarding processes and foster favoritism and irregularities. In addition to the sample evaluated, it was calculated that the Municipality paid $16,428 in excess.
The two-finding audit notes that none of the purchase orders for fuel from the wholesaler could be located. The Finance director certified that the supplier did not present the copies of the fuel purchases from the wholesaler with each invoice, and the pre-auditor indicated that she did not request the invoice from the wholesaler.
This situation, contrary to the Regulation for Municipal Administration of 2016 and to the conditions of the contract with the bidder, makes it impossible to verify, in all its details, the correctness and propriety of the disbursements.
Contrary to contractual clauses, the bidder subcontracted the dispensing of gasoline with two private gas stations without the written authorization of the Municipality. This situation allowed, among others, unauthorized persons to provide the services.
This second and final report on Rincón covers the period from July 1, 2016 to December 31, 2019.
See the Audit Report M-21-41.
To see other published reports, visit our Audit Reports section.
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