Press Releases

Questionable disbursement for a change in a bid and construction of works without obtaining permits in the Municipality of Añasco

The Office of the Comptroller of Puerto Rico (OCPR) issued a qualified opinion of the fiscal operations of the Municipality of Añasco. 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 of Añasco paid a price higher than that awarded in the bid of June 21, 2022, for the Project of Scarification and Repaving of municipal streets. The Municipality requested federal funds from the Community Development Block Grant administered by the Department of Housing with the terms agreed in the bid, among them, the payment of $50 per cubic meter for asphalt cutting. The contractor reported by letter on March 20, 2023, that the scarification price would amount to $80 per cubic meter due to the difficulties in performing the work. In this regard, the Municipality awarded a new contract and disbursed $15,076 in excess of what was agreed in the general bid. On the other hand, as of April 2, 2024, the Municipality had not required from this contractor the payment of $13,674 in construction excise taxes and municipal patents.

This situation of the payment in excess of what was awarded in the bid was referred to the evaluation of the inspector general of the federal Department of Housing so that he takes the corresponding measures.

The audit, of 11 findings, notes that the Municipality did not obtain the permit from the Permits Management Office for the reconstruction and rehabilitation of the Daguey Children's Park and Outdoor Basketball. It also did not obtain the public liability policy for the Espino Indoor Basketball Court-Baseball Park project, nor required the payment bond and the performance bond of other works and permanent improvements. In fact, the Municipality did not designate an engineer to supervise the works performed as established by the contracts, but designated municipal employees without engineering license to certify the works.

The report reveals that the requisition for the purchase of a motorcycle for the Municipal Police specified a particular brand and model, a situation that prevents free competition. In addition, from the examination of the disbursement vouchers, quotes managed by a person without authorization were verified, other quotes without identifying the employee who worked on them, and requisitions prepared up to three months after having the quote. These situations encourage irregularities to be committed.

The OCPR's auditors detected budgetary credits for the payment of contracts for $603,188, for which purchase orders were not issued at the time they were awarded but until two months later. This fact prevents maintaining effective control of the budgetary allocations. In addition, the pre-interventor of the Finance office did not verify that the vouchers had the original invoice of the suppliers, and the certification of absence of interest on the part of the employees in the profits of the goods acquired.

The Report indicates that the delays of up to 17 months in the contracting of the audit services of the financial statements from 2021 to 2023, as well as the delays of up to 13 months in submitting the financial statements of 2021 and 2022 to the Federal Audit Clearinghouse, prevent having updated information and may affect the allocations of federal funds. In addition, the Municipality registered copies of 264 contracts and 31 amendments for $5,047,279 with the OCPR, with delays of up to 10 months. These copies of the contracts must be registered within the 15 days following their awarding, as provided by the regulations.

The Municipality of Añasco sent up to two years late to the OCPR the Certification on the Status of Privatizations, and 28% of the monthly Payroll and Positions reports, up to 57 days later outside the established term. These delays deprive the OCPR, the Government and the public of having available updated information on the Municipality's operations.

In contravention of the Regulation on Notification of Losses, the Municipality did not report to the Office of the Comptroller nor conducted the administrative investigations in 15 of the 16 municipal vehicle accidents. In addition, property inventories were not conducted from January 2021 to 2023 and 2,200 units without a property number were detected.

The Municipality of Añasco lacks a public documents administrator, and two employees who had interim appointments in said function did not meet the requirements of the Public Documents Administration Program of the Institute of Puerto Rican Culture. In addition, the deficiencies with the files and the minutes of the Bidding Board do not allow maintaining complete and reliable records of the agreements established.

The auditors also identified that, as of April 26, 2024, the Municipality had not submitted to the Secretary of Justice the information and documents required by the Lawsuits Registry Act of 2003. This fact prevented the Department of Justice from being informed about the existence of those lawsuits.

The Report comments that the Municipality paid $372,223 in lawsuits for actions of unearned salaries, damages and breach of contract, among others, without obtaining benefits or services in return. In addition, as of December 31, 2023, three civil lawsuits were pending resolution in the courts for $987,616.

The General Fund budget was $12,057,440, $11,056,802, $11,403,640, and $11,445,606, from 2021 to 2024 respectively. The financial statements reflected surpluses of $1,487,66925, $42,860, and $2,699,070 from 2020 to 2022, respectively.

The audit recommends that the director of the Office of Management and Budget ensure that the Municipality of Añasco complies with the Corrective Action Plan of the OCPR.

This first report of Añasco covers the period from January 1, 2021 to December 31, 2023.

The Audit Report OC-25-24 can be obtained on our website: www.ocpr.gov.pr.