Comptroller reveals fuel purchase without bidding for over $1 million in Yabucoa
The Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Yabucoa. A qualified opinion is issued when the noncompliances, individually or as a whole, are significant but not pervasive.
The Report reveals that the Municipality of Yabucoa purchased fuel from 2020 to 2023 without holding a public bidding process. Current law provides that when purchases of materials, equipment, and other supplies exceed $100,000, the procedure of holding a public bidding process must be followed. Instead, they issued 78 purchase orders for $1,459,663 for the supply of fuel. These actions prevented free competition among the largest number of suppliers.
The four-finding audit notes that the Municipality disbursed $14,000 for the purchase of a used 2007 Kubota tractor, which had not been used since its acquisition due to mechanical defects. The tractor was part of the out-of-Puerto Rico purchase of three units of heavy equipment in 2019, for $39,625. As of April 3, 2023, the tractor remained at a private repair shop, and had served no purpose nor benefited the public interest. (See photos in Appendix 1 of the Report)
The Municipality disbursed $4,000 in excess when paying a judgment for collection of money resolved in the courts on December 7, 2016. In addition, as of June 30, 2023, they had not recovered $71,566 for various concepts published in the Comptroller's audit reports M-10-66 of 2010, M-15-08 of 2014, and M-19-20 of 2018. In this regard, it is recommended that the Mayor instruct the recovery of that money.
The auditors detected multiple control deficiencies with the disbursement vouchers and their supporting documents. For example, vouchers were found that were not marked as paid, without details of the goods received, or lacking mandatory justifications, among others. In addition, in three disbursement vouchers for $241,802, the budget appropriations were not encumbered before receiving the goods. These situations encourage irregularities in the disbursement of public funds.
The audit notes that from 2021 to 2023, the Municipality contracted a regular corporation for $3,514,533 to perform supervision, inspection, design, and construction work. Current law indicates that these services must be provided by a professional corporation, with all shareholders licensed, and dedicated to the service established in the certificate of incorporation.
The Report also notes that the Municipality of Yabucoa maintained, from fiscal year 2020 to 2022, deficits of 36% of its operating budget. The Mayor and the Municipal Legislature must ensure that no amount exceeding the appropriations and authorized funds is spent or encumbered in a fiscal year. The Municipality's General Fund budget was $15,516,745 in 2020, $16,322,003 in 2021, $15,774,087 in 2022, and $14,429,274 in 2023.
Another significant situation for the operation of Yabucoa is the eight civil lawsuits for $13,695,880 pending resolution in the courts, as of June 30, 2023. These lawsuits are for the payment of construction excise taxes, deficiency in the payment of business licenses, damages, and expropriation.
The audit recommends that the director of the Office of Management and Budget ensure that the Municipality of Yabucoa complies with the Corrective Action Plan established by the Office of the Comptroller of Puerto Rico
This Yabucoa report covers the period from July 1, 2019, to June 30, 2023. The Audit Report OC-25-05 can be obtained on our website: www.ocpr.gov.pr.
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