The Comptroller reveals overpayments and changes contrary to law in a bid to purchase asphalt in Las Marías
The Office of the Comptroller of Puerto Rico (OCPR) issued a qualified opinion on the fiscal operations of the Municipality of Las Marías. A qualified opinion is issued when the noncompliances, individually or together, are significant but not pervasive.
The Report reveals that after holding a general bid to acquire spread and compacted asphalt, the Bidding Board awarded the purchase at $114.75 per ton of asphalt. After the award on June 3, 2022, the Board approved changing the awarded price every 90 days, as requested by the benefited corporation, contrary to what was established in the General Conditions and Instructions of the bid. In this regard, the Municipality formalized two contracts with this clause and with the increase to $125.70 per ton.
The specifications of a general bid cannot be amended after it has been awarded. The benefited corporation had committed to honoring the prices and keeping them firm for the first 12 months of the contract's term. Neither the Municipality nor the Bidding Board had authority to set aside the provisions of the 2016 Municipal Regulation, nor of the 2019 Bidding and Acquisitions Regulation of the Municipality.
This situation caused the overpayment of $13,950, and limited the participation of the other bidders.
The eight-finding audit notes that the Municipality of Las Marías invested $72,189 in the construction of a horse track for which it did not obtain the permit from the Permits Management Office. The examination of the project file had no reports of work performed and, on a visit on October 9, 2024, they found the track deteriorated and useless.
The Report publishes multiple deficiencies with the disbursement vouchers and supporting documents for the payment of fuel to the gas station that obtained the bid for $100,000. For example, the reconciliations were not prepared for any of the 17 gasoline prepayments, nine disbursement vouchers for $84,426 did not have the supporting invoices, and it was not verified whether the price of the fuel invoiced did not exceed $0.30 per gallon as established in the contract formalized on August 1, 2023.
In addition, 39% of the Daily Driver Reports of the municipal vehicles lacked the data for entry, exit, mileage traveled, fuel levels and driver's signature. These reports allow the proper use, custody and maintenance of the assigned vehicles to be ensured.
The internal auditor position of the Municipality of Las Marías has been vacant since August 23, 2023. The Internal Audit Unit only has one secretary. This situation does not allow continuous and effective oversight of its finances and operations.
In fact, the Report highlights the lack of oversight by the Audit Committee of the Municipal Legislature, since from 2020 to 2024 it met only on three occasions. This situation of not maintaining continuous oversight fosters the commission of irregularities and deficiencies in municipal operations.
The audit reveals delays of more than a year in the delivery of the audited financial statements of 2022 and 2023 to the Federal Audit Clearinghouse as established by the Code of Federal Regulations. As of April 25, 2025, the Municipality had not delivered the 2024 financial statement. This situation may affect the allocation of federal funds.
On the other hand, the absence of a public documents administrator does not allow adequate control of the documents to be maintained. This position is responsible for complying with the Public Documents Administration Program, attached to the Institute of Puerto Rican Culture (ICP). From 2020 to 2024, the Municipality had not submitted to the ICP the inventory, the retention plan or the disposition list of the documents.
In addition, the area designated to archive the public documents did not have an air conditioner, a smoke detector, or humidity control equipment. The boxes were on the floor stacked one on top of the other and the area lacked sufficient shelving. A similar situation had been commented on in Audit Report M-22-08 of 2021.
Municipal autonomy entails fiscal autonomy. The budget comprises an estimate of expenses and the estimated resources and income. From the examination of the budgets from 2020 to 2024, it is revealed that 58% of the operational budget comes from State Government funds. In this regard, the Report recommends that the mayor identify measures that allow it to prepare for the reduction of allocations from the State Government.
Las Marías's budget was $5.9 million in 2020, $5.4 million in 2021, $6.8 million in 2022, $7.3 million in 2023 and $7.7 million in 2024. Its financial statements reflected accumulated surpluses of $1 million in 2020, $485,078 in 2021 and $312,625 in 2023. For fiscal year 2022, the financial statements reflected a deficit of $455,789.
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 first report on Las Marías covers the period from March 1, 2020 to December 31, 2024.
Audit Report OC-25-89 is available on our website: www.ocpr.gov.pr
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