Comptroller reveals excess payments of $150 thousand to a company that operates the traffic fine system in Cataño
The Office of the Comptroller of Puerto Rico (OCPR) issued a qualified opinion on the fiscal operations of the Municipality of Cataño. A qualified opinion is issued when the breaches individually or collectively are significant, but not pervasive.
The Report reveals that the Municipality of Cataño paid $149,214 in excess to the company contracted to administer the system for issuing and collecting fines. The 5 contracts and 72 amendments, granted from June 2017 to March 2023, stipulated a benefit of up to 45%, instead of a compensation no greater than 10% of the income generated for contracts of a contingent nature. A contingent contract is established to fulfill an obligation subject to the income generated.
The audit, of five findings, also notes that the Municipality paid $46,500 to a contractor for maintenance work on two sports complexes that were carried out between 2019 and 2022 by the municipal brigades of the Department of Recreation and Sports and not by the contractor. This situation is attributed to the fact that the former directors of Public Works did not protect the interests of the Municipality.
In fact, in Audit Report OC-25-57 it is commented that this contractor and one of the former directors of Public Works were charged and pleaded guilty to participating in a conspiracy scheme.
Contrary to the Municipal Code of 2020, the then directors of Finance forgave debts totaling $504,210 to 10 taxpayers, despite the fact that the debt of 6 taxpayers did not exceed 5 years. In addition, 3 forgivenesses did not have the approval of the Municipal Legislature and 2 did not have written agreements.
The Municipality granted a contract to a non-hazardous solid waste transportation and disposal services corporation for $27,480,740. However, in said contract the basis used to determine the 12,000 collection units for which it would pay the contractor was not established. No evidence was found that a count of the collection units had been carried out. The contract formalized by the then deputy mayor, in May 2017, authorized said number of collection units despite the fact that the 2020 Census identified 9,505 occupied dwellings in Cataño. In addition, LUMA Energy figures indicate that, from 2017 to 2021, the figures for residential and commercial dwellings ranged from 5,681 to 7,451 units. In fact, the incorporator and resident agent of this corporation pleaded guilty to making weekly illegal payments to the former mayor, as we commented in Audit Report
OC-25-57.
The OCPR auditors found that the then directors of Municipal Housing did not maintain adequate control of the receipt, custody and dispatch of construction materials. In a visit made to a residence on May 6, 2022, for which reconstruction materials had been purchased for $22,113, it was not reconstructed nor did the materials appear. Other visits made in 2022 to five residences, for which material had been purchased for $16,240, observed that the roofs had not been repaired, and the relatives had not received the materials either.
The Report comments that the Municipality of Cataño had to pay $234,560 for political persecution and unjustified dismissals without receiving any benefit. These three personnel action cases date from 2010, 2014 and 2017 and were resolved before the Public Service Appeals Commission.
As of May 19, 2025, $13,620,612 had not been recovered for various concepts, as recommended in audit reports M-17-14 of 2016, OC-24-18 of 2023 and OC-25-57
of 2025. In addition, the Municipality has 22 civil lawsuits totaling $5,834,023 pending resolution by the courts as of December 31, 2022.
The Municipality's General Fund budget rose from $33.7 million in 2019, to
$34.2 million in 2020, $35 million in 2021, $36.7 million in 2022, and up to $36.7 million in 2023. The audited financial statements reflected surpluses of $4.6 million in
2019, $3.9 million in 2020, $9.9 million in 2021, $15 million in 2022 and
$16.8 million in 2023.
The audit recommends to the director of the Office of Management and Budget that he ensure that the Municipality of Cataño complies with the Corrective Action Plan established by the OCPR.
This second and final report of the Municipality of Cataño covers the period from January 1, 2019 to December 31, 2022
.
The Audit Report OC-26-07 can be obtained on our website: www.ocpr.gov.pr.
Some documents on this page are saved in PDF format.
To view these documents, you must have the following free program installed.
