The Comptroller reveals multiple deficiencies in the purchasing and disbursement operations in Adjuntas
The Office of the Comptroller of Puerto Rico (OCPR) issued a qualified opinion on the fiscal operations of the Municipality of Adjuntas. A qualified opinion is issued when the noncompliances, individually or together, are significant but not pervasive.
The Report reveals that the Municipality of Adjuntas did not encumber the budgetary appropriations of $949,498 for the payment of 30% of the contracts and 75% of the amendments examined. These contracts were granted to purchase asphalt, repair public roads and stabilize an embankment. In contravention of the 2016 Municipal Regulation, the director of Finance indicated that he encumbered the funds upon receiving the invoice and not before receiving the materials or before the services were rendered.
From January 13, 2021 to December 29, 2023, the Municipality granted a total of 607 contracts and 124 amendments for $17,047,941. This situation, of not encumbering the credits, prevents effective control of the budgetary appropriations and may incur overdrafts and unnecessary litigation.
The five-finding audit notes that, without the Municipality's authorization, the work of spreading and compacting asphalt and installing safety barriers on the bridge of road 522 of Barrio Garzas was subcontracted to two companies. The Municipality and the official in charge of the subcontracting expressed that they were unaware of this situation, which was prohibited in the contract that the mayor had formalized with the contractor on February 16, 2023 for $128,704.
The Report reveals multiple control deficiencies with the disbursement vouchers and their supporting documents. From the examination performed, 87% of the voucher payment supporting documents were not marked as paid; in 29% of the vouchers, the quotations did not establish the name, title and signature of the official in charge of accepting them; and in 14% of the vouchers, the invoices lacked the supplier's certification regarding the absence of interest.
The disbursements of $2.9 million issued from 2021 to 2024 corresponded to the acquisition of vehicles, equipment and materials related to the management of the COVID-19 pandemic, among others. This situation fosters the commission of irregularities in the disbursements and renders the established internal controls inoperative.
Without requesting the consent of the Municipal Legislature, the then mayor settled a lawsuit filed on August 11, 2018 before the Court of First Instance, for the dismissal of an employee whose transitory contract was in effect. Any settlement agreement in judicial actions that entails some type of disbursement greater than $25,000 must be submitted to the consideration of the Municipal Legislature before being remitted to the judicial forum. This situation also affected the Municipality's resources since it had to disburse $25,289 without receiving service in exchange.
As of August 21, 2024, the Municipality had not remitted to the Secretary of Justice the information and documents required by the 2003 Civil Lawsuits Registry. This situation prevents these lawsuits from being accessible to the citizenry. The information indicates that five lawsuits had been resolved and four lawsuits are active with claims totaling $1.6 million.
The audit comments that the mayor maintains a payment plan with an outstanding balance of $14,223 with the Office of Government Ethics (OEG). This Office imposed an administrative fine of $16,000 on him in 2023 for granting two contracts and two amendments to a company of a relative of the director of the Municipality's Public Works Office, without having obtained the waiver required by the OEG.
As of July 22, 2024, four civil lawsuits for $950,000 for dismissal, and for damages, were pending resolution by the courts.
Adjuntas's budget increased from $5.8 million in 2021, to $6.8 million in 2022, to $7.4 million in 2023 and to $7.5 million in 2024.
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 on Adjuntas covers the period from January 1, 2021 to December 31, 2023.
Audit Report OC-25-87 is available on our website: www.ocpr.gov.pr.
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