The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Canóvanas. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant but not pervasive.
The one-finding Report reveals that the Municipality did not formalize 92 contracts with the successful bidders in the bids held from 2018 to 2020 for the acquisition of goods and services. Instead, it issued a purchase order. A similar situation had been commented on in Audit Report M-19-01 of 2018.
The absence of written contracts can be detrimental to the Municipality since, with no legal documents establishing the rights and obligations of the parties, the bidder may fail to honor the awarded prices. In fact, the Municipal Regulation establishes the requirements for formalizing contracts with successful bidders in general bids. This is reiterated by the Supreme Court, which holds that municipalities must comply with the formality of executing contracts in order to disburse public funds.
The audit comments that the Municipality had a current deficit in the Operational Fund of $3,058,733 for fiscal year 2020. The budget deficit reduces the resources available for the following fiscal year since the amount must be allocated in the next budget on a preferential basis.
As of June 30, 2020, thirteen civil lawsuits totaling $12,950,000 were pending resolution by the courts.
The Report recommends that the Office of Management and Budget ensure that the Municipality of Canóvanas complies with the Corrective Action Plan established by the Office of the Comptroller. This second and final report on Canóvanas covers the period from July 1, 2017 to November 30, 2020.
See Audit Report M-23-20.
To see other published reports, visit our Audit Reports section.
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