Comptroller reveals payments of more than half a million without the required bid and quotations in Morovis
The Office of the Comptroller of Puerto Rico (OCPR) issued a qualified opinion on the fiscal operations of the Municipality of Morovis. A qualified opinion is issued when the noncompliances, individually or together, are significant but not pervasive.
The Report reveals that the Municipality of Morovis paid $593,653 to two contractors for green area maintenance services without holding a bid. Of this amount, $385,870, 65%, were federal funds from the American Rescue Plan Act and COVID-19 funds. The law and the Bidding Regulation of 2021 provide that it is a requirement to hold a public bid in the purchase of materials, equipment, medicines and other supplies when they exceed $100,000.
In addition, the Municipality granted two contracts for $47,500 for land cleaning and maintenance, without obtaining at least three quotations. These situations prevent free competition, lead to favoritism and to irregularities being committed, among others.
The audit, with six findings, notes that, without legal authority, the Municipality paid an official $6,375 for the excesses of accumulated vacation leave, in violation of Ordinance 15 of 2017. In addition, the director of Human Resources was paid a differential of $2,907 to handle personnel matters of the Recovery Office; tasks that were already defined in the Position Classification and Compensation Plan of 2008.
The auditors detected that the Municipality appointed an employee on 11 occasions to the positions of worker and heavy vehicle driver without being qualified by the Office of Qualification for Public Service. That employee was convicted of felonies and sentenced to seven years of probation in 2008. The fact of not being qualified as required by law could cause the Municipality to have to reimburse the Department of Labor and Human Resources for the salaries earned under Act 52-1991 of Employment Security.
On the other hand, the Municipality did not obligate the budgetary appropriations of more than $2.2 million at the time of granting seven contracts and three amendments for the debris removal, construction and permanent improvements service. The recording of the obligations was carried out up to 100 days after formalizing the contracts. A similar situation had been commented on in 2020, in the Audit Report M-21-08.
Without obtaining the permits from the Department of Transportation and Public Works (DTOP), the Municipality of Morovis contracted the construction of 15 monuments to identify the wards for $348,835. This situation exposes the Municipality to fines and penalties since it did not allow the regulatory function of the DTOP, and the monuments were built in violation of the applicable laws and regulations. (See attached photos, related to this finding 5)
The Report publishes multiple deficiencies with the absence or delay in completing the documents required of the contractors, such as: the policy of the State Insurance Fund Corporation, bonds to guarantee the payment of wages and materials (payment bond), and bonds to guarantee the fulfillment of the contract (performance bond), among others. In this way, the Municipality does not have guarantees that the contractors comply with their employees, for example, in case of accident; and they did not verify whether the contractors complied with the legal requirements to formalize contracts.
The audit comments that the Court of First Instance, Superior Chamber of Morovis, issued a judgment on April 23, 2024, and ordered the Municipality to pay $375,000 to a solid waste collection contractor. The contractor had sued the Municipality and the mayor on July 27, 2018 for breach of contract and damages for malicious action in canceling the contract in 2017.
In addition, as of September 26, 2024, four civil lawsuits for damages and forced expropriation for $4 million were pending resolution by the courts.
From fiscal years 2019 to 2024, Morovis has had a budget of $10.5 million, $11.1 million, $10.2 million, $9.8 million, $8.7 million and $8.5 million respectively. The audited financial statements reflected surpluses of $781,812, $1.1 million and $979,700 for fiscal years 2019 to 2021.
The Report recommends that the director of the Office of Management and Budget ensure that the Municipality complies with the Corrective Action Plan established by the OCPR.
This second and final report covers the period from January 1, 2019 to January 31, 2024.
The Audit Report OC-25-74 can be obtained on our website: www.ocpr.gov.pr
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