The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Hatillo. A qualified opinion is issued when the noncompliances, individually or in the aggregate, are significant but not pervasive. The Report reveals that the Municipality overpaid a contractor $3,079 for the final disposal of non-hazardous vegetative material. This amount is equivalent to 12% of the payments for that service, in which 439 cubic yards exceeding the trucks' load capacity were billed. This amount was recovered in 2022.
In addition, payment of invoices was authorized without the certification of the employee who had knowledge of having received the services; hundreds of receipts were identified that did not have the license plate, make, and capacity in cubic yards of the trucks, and some were illegible. These situations made it impossible to verify the correctness, accuracy, and propriety of the disbursements.
The six-finding audit notes that the Municipality paid $181,000 to two contractors in 2018 for the collection of debris and vegetative material caused by Hurricane María, which could not be validated. Of this amount, $120,000 were funds from the Federal Emergency Management Agency – FEMA, and $60,000 were municipal funds.
Contrary to FEMA Guidelines and the regulations in force, the Municipality did not prepare the load tickets, which must contain in writing the contractor's name, license plate number, and load capacity, among other data. The then director of Finance stated that the load tickets were not prepared because they did not intend to file a claim with FEMA. In addition, the Municipality paid 21 invoices without the contractor's signature, a fact that fosters the commission of irregularities and prevents their timely detection.
In this regard, the Report comments that FEMA denied the Municipality the reimbursement of $72,450 for the collection and disposal of debris and vegetative material, since these expenses were claimed under the equipment rental subcategory and not under the debris removal subcategory.
On the other hand, as of July 31, 2021, the “Advanced Requisition Management” module for the requisition of purchases and services had not been used, for whose access and use the Municipality paid $35,000. This useless disbursement is contrary to Act 107-2020, Municipal Code of Puerto Rico.
The Report reveals that the request for quotations to award six construction contracts for $240,015 did not contain the name, title, and signature of the official who carried out the process. Testimonial evidence revealed that the director of Recreation and Sports was the one who carried out the process, but did not document it. In addition, for these six contracts, the Municipality did not request the required payment bond on each project.
The Municipality of Hatillo did not submit for the consideration of the Municipal Legislature the formalization of 11 agreements for $423,000 with a nonprofit entity to operate the municipal 9-1-1 System. The agreements did not establish the free use of the office, the water and electricity services, or the loan of two motor vehicles.
In addition, the Municipality improperly paid $44,375 without a contract to the nonprofit entity for ambulance services and to operate the 9-1-1 system in October 2017. A similar situation had been commented on in Audit Report M-21-22 of October 23, 2020.
The Report comments on the $6,000 fine that the Office of Government Ethics imposed on the mayor for using the conference room and the mayor's office to record a video promotion of his political candidacy while serving as acting mayor. On June 10, 2022, the payment agreement resolution was issued.
The Municipality contracted the president of a corporation as an agronomist to improve the landscaping of the public plaza, without having the current license and the membership required to practice the profession. This situation was referred on August 10, 2022 to the consideration of the presidents of the Examining Board and the Association of Agronomists of Puerto Rico.
As of April 25, 2022, the Municipality had not evaluated a recovery recommendation for $3,000, related to the unauthorized subcontracting, by the municipal administration, of soil study services.
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.
Audit Report M-23-21 can be obtained on our website: www.ocpr.gov.pr.
Some documents on this page are saved in PDF format.
To view these documents, you must have the following free program installed.
