The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Guayama. A qualified opinion is issued when the noncompliances, individually or in the aggregate, are significant but not pervasive.
The Report reveals that, in 2020, the Municipality contracted a regular corporation not authorized to practice engineering or to offer inspection and advisory services related to construction projects. This contract would be void for failing to comply with the legal framework in force.
In addition, the corporation's president was not a licensed engineer, and was not registered with the Association of Engineers and Land Surveyors of Puerto Rico, nor with the Examining Board. The officials responsible for contracting in Guayama knew that the corporation's officer was not a licensed engineer and still authorized a disbursement of $22,750 in 2021.
This situation was referred to the Secretary of Justice on October 7, 2022 so that he may take the corresponding action.
The two-finding audit notes that the invoices of the aforementioned contractor did not contain a detailed and specific breakdown of the work performed. In this regard, the director of Finance did not require from him a detail of the services since the invoices were signed by the special projects manager, who in turn confirmed that he neither observed nor required from the contractor any report on the work performed.
The Report comments that the former mayor pleaded guilty to conspiracy and bribery for a scheme amounting to $95,000, and resigned from his post on April 8, 2022. The indictment alleges that he contracted, with federal funds, an asphalt company in exchange for receiving $1 per square meter paved.
In addition, another former Guayama official pleaded guilty on April 25, 2022 to the federal criminal charge of conspiracy. The indictment alleges that he received $1 for each meter of asphalt removed by the contracted company and $15,000 in cash.
The soccer stadium contracted from 2015 to 2017 was halted in 2016 since the contractor filed for bankruptcy before the Federal Bankruptcy Court for the District of Puerto Rico. The Municipality had disbursed $3,339,314 to the contractor and owed it $1,488,560. Nonetheless, the Court issued a ruling in 2019 and ordered the Municipality to comply with the payment agreement to the contractor.
This nonpayment is attributed to the fact that the Government Development Bank did not disburse the funds in light of the declaration of fiscal emergency in the government of Puerto Rico in 2016. The construction of the stadium remains halted, but in good condition. (see photos in Exhibit 1 of the Report)
As of December 31, 2021, seven lawsuits were pending resolution by the courts for $3,818,414. In addition, five cases filed by employees were pending resolution before the Public Service Appellate Commission, and one case before the Office of the Women's Advocate.
The audit recommends to the Office of Management and Budget that it ensure that the Municipality complies with the Corrective Action Plan established by the Office of the Comptroller. This second and final report on Guayama covers the period from July 1, 2017 to December 31, 2021.
See Audit Report M-23-20.
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