The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Luquillo. A qualified opinion is issued when the noncompliance, individually or as a whole, is significant but not pervasive.
The Report reveals that the Municipality included scarification work in the contracts for the repaving of streets in the urban center, awarded in the general bids, which were not required in the bid specifications. The president of the Bidding Board indicated that, although the scarification or scoring of the surface was not included, the price offered by the bid winner was accepted, in an alternate offer. This situation did not allow the free competition of the other bidders, nor allow the Municipality to select the best offers. For this alternate work, the Municipality disbursed $308,880 from 2019 to 2020.
The five-finding audit notes that all of the construction projects examined were awarded without obtaining at least three quotations, contrary to the Bidding Regulation of 2018. For these eight projects, seven contracts and nine amendments were formalized for $645,533, one of them paid with federal funds from the Community Development Block Grant program.
The Municipality published and awarded a bid for the revitalization work of the Luquillo Kiosks, without obtaining the construction permit from the Permit Management Office. The permit was obtained six months later. This deficiency has the effect that the OGPe did not exercise its regulatory function and the Municipality had no assurance that the project would be carried out in accordance with applicable laws and regulations. A similar situation had been published in Audit Report M-19-33 of 2019.
The auditors identified that the Municipality did not obligate the budgetary credits in 46% of the contracts and 26% of the amendments examined in the work to restore sports facilities, rehabilitate housing, and repair City Hall, among others. The obligation records occurred up to three months after the formalization of the contract, and in one of the cases the funds were obligated 53 days after completing the work. This lack of control may cause overdrafts and unnecessary litigation for the Municipality.
Contrary to current regulation, the property custodian did not perform the annual physical inventories of the personal property from 2018 to 2021. In addition, the Annual Certification of Losses and Irregularities in the Handling of Public Funds or Property for fiscal years 2020 and 2021 was submitted to the Office of the Comptroller up to two years later. This certification, sworn by the chief executive of the agency, must be submitted no later than August 31 of each year.
The Municipality of Luquillo did not conduct the required administrative investigations of the 11 accidents that occurred from 2018 to 2021, nor of the theft of property valued at $17,281 in 2018. In addition, the Municipality notified the Office of the Comptroller of eight of the 11 accidents three and a half years later than stipulated in Regulation 41 on the Notification of Losses to the Office of the Comptroller.
The Report recommends that the Office of Management and Budget ensure that the Municipality of Luquillo complies with the Corrective Action Plan established by the Office of the Comptroller. The Luquillo report covers the period from July 1, 2018, to June 30, 2022.
The Audit Report M-23-32 can be found on our website: www.ocpr.gov.pr.
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