The Comptroller of Puerto Rico issued an adverse opinion on the fiscal operations of Jayuya. The tests performed and the evidence revealed deviations from provisions of law and regulations related to the purchase and construction of a biodiesel fuel plant, the lease of trucks, and the contracting of non-professional personal services, among others.
The Report reveals that, in 2008, the Municipality awarded a bid for the construction of a biodiesel processing plant to the only company that bid, whose president prepared, reviewed, and approved the specifications and supplied the proposed sketch for the construction. This plant would use the used cooking oil collected at the Municipality's restaurants to transform it, through chemical processes, into biodiesel fuel.
This manipulation undermined the purpose of obtaining the best offer through free competition and may have constituted the crime of improper interference in governmental operations by the mayor and the secretary of the Board.
Contrary to the law and regulations in effect, the Municipality did not consider that the construction company could not have a direct or indirect interest in the administration of the project. However, the company obtained 10 additional contracts for the operation of the plant. Nor did the Municipality take into account that the company had not filed tax returns from 2002 to 2006, did not request copies of the licenses and authorizations to do business, nor the bonds for the execution of the contract (performance bond) and to guarantee the payment of labor (payment bond).
The three-finding audit notes that the Municipality bypassed holding a public bid in 2011 to expand the biodiesel processing plant and awarded a professional services contract for $121,666. There was no evidence justifying its expansion since, after seven months in operation, it had produced only 4% of the 150,000 gallons required in the bid notice. Four days after signing said contract, the Municipality paid 50% of its amount without the contractor performing any work and without having registered the contract at the Office of the Comptroller.
The Municipality of Jayuya failed to receive $26,673 for the use of the property and supplies available at the plant, since they did not carry out collection efforts for the rent or for the payment plan of the plant lease contract formalized on December 12, 2012. This situation resulted in the failure and closure of the project. As of March 5, 2015, the biodiesel plant had ceased its operations.
These situations were referred on July 30, 2018 to the Department of Justice and to the Office of Government Ethics so that they could determine the appropriate actions; as of the date of this Report, they are pending resolution.
The Report reveals that the then-director of Municipal Public Works did not prepare the records of the trips made by the rented trucks for four projects financed with funds from the Federal Emergency Management Agency and with a special fund. The six contracts and extensions for $195,330 were formalized between 2012 and 2014 with the same construction bidder of the aforementioned biodiesel plant. In addition, the then-director overestimated the amount of gabions by 630m3 ($17,640) for the construction of a wall at the Municipal Cemetery and did not require the contractor to provide the official supporting documents for the supply of 331m3 ($9,268).
The finding also indicates that, despite the expiration of the contracts, the Municipality continued to dispense diesel to the trucks for the sum of $5,017. This situation was referred to the Department of Justice on June 8, 2017 and, as of this date, is pending resolution.
The audit comments that the contractor supplying gabions for the Municipal Cemetery project submitted invoices with 30 duplicated delivery slips to make it appear that he delivered the entirety. In this way, improper payments of $12,962 were made and the crimes of aggravated misappropriation, fraud, and ideological falsehood, among others, may have been constituted. These situations were referred to the Department of Justice on June 8, 2017 and to date are pending resolution.
On the other hand, the truck contract contained a clause not limiting the contractor's services exclusively to the contract, but rather allowing him to offer services to private entities. In this regard, situations were detected in which the hauling of asphalt and gabion stone were offered with the same trucks during the same time. This practice is inadequate since it led to double compensation for the same trucks.
The Comptroller's auditors identified that the Municipality contracted, for non-professional personal services and for health services, contractors who had responsibilities, benefits, payment agreements, and schedules similar to the positions contemplated in the Classification and Compensation Plan for career positions. In addition, contrary to Act 81-1991, the Autonomous Municipalities Act, the Municipality paid the contractors the settlement of accrued vacation and sick leave as of the date of their separation.
The Report also comments that the aforementioned bidder used the word Engineering in the corporate name with which it participated in the bid, without being in the Registry of Members. This fact was referred to the College of Engineers and Surveyors of Puerto Rico on July 30, 2018 since the bidder is not authorized to practice the profession of engineering or surveying. To date, the referral is pending resolution.
This third and final report of Jayuya covers the period from January 1, 2012 to June 30, 2016.
See Audit Report M-22-19.
To see other published reports, visit our Audit Reports section.
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