The Office of the Comptroller of Puerto Rico issued an adverse opinion on the fiscal operations of Gurabo. The tests performed and the evidence revealed deviations from provisions of law and regulations related to the splitting in the awarding of contracts and to the payments for contingent professional services to a contractor.
The Report reveals that, from 2018 to 2020, the Municipality bypassed the requirement to hold a public bidding in the awarding of 22 contracts and 23 amendments for $2,144,464 to eight contractors to pave subdivisions, paint sports facilities, and rebuild courts, among others. Instead, it split the works into more than one contract so as not to exceed the $200,000 limit established by law for holding biddings, and awarded the contracts through the request for quotes.
This is the fourth time that the Office of the Comptroller has identified this situation in the last 10 years in Gurabo. Reports M-18-37 of 2018, M-15-12 of 2014, and M-13-05 of 2012 comment on situations similar to the finding on the splitting of the cost of construction works.
This situation is attributed to the fact that the mayor and the Bidding Board of Gurabo departed from the applicable law and regulations. In addition, the splitting of works has the effect of impeding free competition among bidders and may foster favoritism, fraud, and collusion.
The two-finding audit notes that Gurabo improperly paid $11,825 to a consultant. The consultant for legal, accounting, and financial advice determined a deficiency in the collection of a debt of a pharmaceutical company, which the Municipality's Finance director had not declared delinquent uncollectible or the product of the identification of tax evaders prior to the case being referred to the consultant, as established by Act 107-2020, Municipal Code of Puerto Rico. The consultant charged his fees from the 10% of his analysis of the determination of the deficiency.
In addition, the Municipality made a payment to the consultant in 2017, without having a contract in force. The Finance director extended the term of the consultant's contract through purchase orders contrary to the law. Purchase orders do not extend the term of a contract granted, nor after its expiration.
This second and final report on Gurabo covers the period from January 1, 2017 to August 31, 2020.
See Audit Report M-22-31
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