The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Caguas. A qualified opinion is issued when the noncompliance, individually or as a whole, is significant but not pervasive.
The Report reveals that the officials of Caguas did not provide the auditors of the Office of the Comptroller with all the documentation on the awarding of the parking meter service contract in 2013. The bid was awarded to company A, which had gone through the qualification process and the submission of an economic proposal. The Municipality granted the contract to company C, whose president was the same as that of company A, and a payment of $35,000 monthly or 24.15% of the monthly parking meter occupancy, and 30% of the fines, was established.
This situation of lack of information does not allow for verifying whether the transactions were carried out correctly; in addition, it fosters irregularities being committed and not being able to detect them in time.
In 2015, the Municipality canceled the 2013 contract and transferred the supervision and administration of the parking meter service from the Corporation for the Development of the City of Caguas, Inc. solely to the Municipality. In this regard, the Municipality of Caguas formalized a second contract with company C for the operation of the parking meters and fine system, effective from 2015 to 2023.
The two-finding audit notes deficiencies in the recording of vendor accounts in the mechanized data processing system Systems, Applications, Products in Data Processing – SAP. The auditors detected the creation of 216 vendors without an employer identification number, 102 vendors for whom two accounts had been created, and 14 vendors for whom purchase orders were issued, not in their name but under the occasional vendor account. This account was created for one-time purchases. In addition, the Municipality indicated a specific brand in the quotation request for two purchases, totaling $32,112. Requisitions must not be restrictive or specify any particular brand, since this would limit competition. These deficiencies foster errors and irregularities being committed and do not promote free competition among the greatest number of bidders.
The Report comments that the Municipality of Caguas had an accumulated deficit in the Operational Fund of $8,557,734 according to the 2018-19 financial statement. The mayor and the president of the Municipal Legislature must ensure that no amount exceeding the appropriations and authorized funds is spent or obligated in a fiscal year.
The audit recommends that the Office of Management and Budget ensure that the Municipality of Caguas complies with the Corrective Action Plan established by the Office of the Comptroller.
This second and final report of Caguas covers the period from July 1, 2015, to December 31, 2019
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The Audit Report OC-24-03 can be found on our website: www.ocpr.gov.pr.
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