The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Barranquitas. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant but not pervasive.
The Report reveals that the Municipality paid $2,097,278 to the successful bidders of four general biddings without having formalized the contracts required by the law and regulations in force. Instead, the purchase of materials was made through purchase orders.
The failure to formalize written contracts prior to the supply of goods or the provision of services can be detrimental to the Municipality given the absence of legal documents that establish the rights and obligations of the parties. In addition, the Supreme Court has stated that municipalities must comply with the legal formalities of executing contracts in order to be able to disburse public funds.
The three-finding audit notes that, as a result of the intervention of the auditors of the Office of the Comptroller, the Municipality agreed to a payment plan with the corporation in charge of disposing of debris from the effects of Hurricane Fiona, to recover $32,770 paid in excess. The contract had stipulated payment of $50 per cubic-yard disposal, while the proposal had established a cost of $44 per cubic yard.
The Report indicates that invoices for medical consulting, paramedics, and ambulance services to address the COVID-19 pandemic were paid without specific and itemized data on the services rendered and the hours invested. This situation prevented full verification of the propriety and correctness of the disbursements made.
The audit comments that, as of June 30, 2023, the Municipality of Barranquitas had nine civil lawsuits for $3,776,631 pending resolution by the courts.
Barranquitas' budget was $9,141,733 in 2020, $8,161,358 in 2021, $8,280,188 in 2022, and $7,707,966 in 2023. The Municipality had its financial statements audited by certified public accountants prepared, which reflected accumulated surpluses of $14,925,537 in 2020, $16,449,212 in 2021, and $18,490,603 in 2022.
The Report recommends that the director of the Office of Management and Budget ensure that the Municipality of Barranquitas complies with the Corrective Action Plan established by the Office of the Comptroller of Puerto Rico.
Audit Report OC-24-52 is available on our website:
www.ocpr.gov.pr.
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