Press Releases

Improper payments for legal representation and sale of lots without complying with the regulations in the Municipality of Culebra

The Office of the Comptroller of Puerto Rico (OCPR) issued a qualified opinion of the fiscal operations of the Municipality of Culebra. 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 allowed a contractor to continue providing consulting and legal representation services, even when the available work hours in the contracts of June 27, 2019 and June 30, 2020 had been exhausted. This had the effect that improper payments for $38,301 were made.

The then mayor and the Finance director did not comply with the laws and current regulations. The original contracts had exceeded the maximum hours worked, for which reason it was necessary to amend them during their term, before exhausting the foreseen hours of service. The amendments to the two contracts were made on later dates, for which reason the payments are retroactive.

In addition, the contractor's 40 invoices did not contain a detailed breakdown of the services rendered or matters addressed, but a general description of tasks by dates and number of hours. In fact, 38% of the amount paid corresponded to non-specific invoices contrary to what is provided by the Professional Services Act of 2004. For example, in the invoices of June and September 2020, the contractor billed a total of $6,968 for 25.75 hours of work performed on June 30 and 30 hours of service on September 25. The invoices did not indicate whether the work was performed by more than one person.

The audit notes that the then mayor and the Public Works director did not request in writing the benefit of legal representation, as provided by Ordinance 16 of 2018 to confront a damages lawsuit filed against them on November 6, 2018 for $250,000. This ordinance, signed on December 19, 2018, was of retroactive application, and authorized the legal representation and the payment of judgments to officials. The law firm that represented the then mayor and the Public Works director billed $9,218 for legal services related to the lawsuit. This finding makes explicit that imposing an additional economic burden and adding additional benefits such as Ordinance 16 may aggravate the fiscal situation of a Municipality.

These situations were referred to the Secretary of Justice and the Executive Director of the Office of Government Ethics on March 6, 2023 so that they take the measures they deem pertinent.

The Report publishes that in 16 of the 50 municipal ordinances approved from August 20, 2020 to October 14, 2021 to sell lots for $500, the beneficiaries did not meet the requirement of having a housing structure on the lot. The evidence obtained validates that some parcels did not have structures in process and others were in a state of abandonment.

This situation, contrary to the Municipal Code of 2020 and the Regulation for Municipal Lands of 2019, encourages irregularities to be committed in the granting of privileges and does not comply with the objective of addressing the housing need.

¬¬¬Moreover, upon the request for the files of a sample of 10 lots sold, the director of Territorial Ordering certified that he had not located two of the files. This situation prevented verifying the correctness and propriety of the procedures related to the awarding and sale of these two lots.

The Report reveals that the minutes of the Municipal Legislature from July 2015 to December 2020, which correspond to ordinary and extraordinary sessions, were not located for examination. This fact does not allow maintaining permanent or reliable records of the agreements established in the Legislature. In addition, it encourages the lack of transparency and trust in the actions of said body.

The audit comments on a judgment of January 21, 2014 which orders the Municipality to return $1,616,650 to the Perpetual Trust for the Special Communities, for failing to comply with the agreements to rehabilitate and build housing and infrastructure projects in Villa Muñeco and Clark, signed in 2004. The Municipality of Culebra proposed on March 10, 2020 to pay the debt in seven annual payments. This offer was withdrawn and they are in negotiation for the Municipality to cede municipal lands to the Trust.

As of June 30, 2022, two civil lawsuits for $455,826 were pending resolution.

The Report also comments that the president of the Municipal Legislature has not taken the training on governmental contracting offered by the OCPR. It is mandatory that all officials or public employees who intervene in the contracting process take this course, which consists of two parts and has been offered on 14 occasions since May 12, 2021.

The General Fund budget was $4,235,131; $4,422,056, $4,603,084 and $3,474,301, from 2019 to 2022 respectively. The financial statements reflected surpluses of $2,205,608, $570,79516, $877,218 and $1,483,887, from 2019 to 2022 respectively.

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

This second and final report of Culebra covers the period from January 1, 2018 to June 30, 2022.

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