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Comptroller of Puerto Rico reveals significant deficiencies in audit of the Municipality of Sabana Grande that affect fiscal, administrative, and internal control management

San Juan, Puerto Rico, (April 17, 2026) – The Comptroller of Puerto Rico, Attorney Carmen A. Vega Fournier, CPA, announced the results of Audit Report OC-26-18 corresponding to the Municipality of Sabana Grande, which covers the period from January 1, 2020 to June 30, 2024. The report contains a qualified opinion, having identified multiple findings that reflect noncompliance with legal provisions and deficiencies in internal controls.

The Comptroller indicated that, although the Municipality's operations were carried out in general terms in accordance with the applicable law and regulations, the deviations noted in the findings affect critical areas such as contracting, the handling of public funds, the administration of revenue, the control of property, and human resources processes.

The audit revealed improper payments of thousands of dollars for work not performed and others without quotations; more than $15,000 uncollected and deficiencies in the payments of contingent contracts related to the billing of medical plans for ambulance services; budget credits not obligated at the time the contracts were granted; loss of property reported with delay; and incomplete documents in personnel files.

In the first finding, the audit revealed improper payments of $13,861 for work not performed on an improvement project at a recreational park. The examination evidenced that items corresponding to the construction of a fence base and the installation of a light pole that were not executed were paid, as corroborated through inspections and statements by the contractor. In addition, deficiencies were identified in the quotation processes, including the absence of the required minimum of proposals and the lack of essential documentation such as signatures, names, and titles of the officials who participated in the process. These deficiencies limited competition and detracted from the reliability of the award process.

In its comments, municipal management indicated that the situations correspond to the previous administration and that the current administration has initiated recovery processes against the contractor, as well as corrective measures to guarantee compliance with the established procedures.

Nevertheless, the Office of the Comptroller of Puerto Rico (OCPR) determined that the finding prevails.

The second finding notes deficiencies in the administration of contingent contracts related to the billing of medical plans for ambulance services. The audit identified $15,168 in uncollected revenue corresponding to checks issued by insurers, as well as improper payments of $416 for duplicate invoices. In addition, it was determined that the Municipality did not withhold $5,297 in income taxes, nor did it adequately register the contracts at the Office of the Comptroller, assigning them a nominal value of $1 instead of a reasonable estimated amount.

Management expressed agreement with some of the observations and indicated that it has initiated collection efforts to recover the funds not received and correct the processes. However, it expressed disagreement regarding the nature of the contingent contracts. The Comptroller concluded that the finding prevails, having failed to comply with specific provisions on the registration and control of contracts.

In the third finding, deficiencies were identified in the obligation of budget credits, including delays of up to 110 days in recording obligations related to contracts, and delays of up to 428 days in the obligation of funds in contingent contracts. These practices weaken fiscal control and increase the risk of overdrafts and unnecessary litigation.

Municipal administration indicated that it has corrected these practices and that the certification of funds is currently ensured before formalizing contracts. Nevertheless, the audit concluded that the deficiencies existed during the period evaluated.

The fourth finding reveals deficiencies in the handling of municipal property losses. 38 units of lost property were identified in 33 incidents, with an estimated value of $738,352. Of these, 13 losses were reported to the Office of the Comptroller with delays ranging between 4 and 998 days, in noncompliance with the terms established by law.

Management indicated that it has given instructions to improve the timely notification of incidents and strengthen controls. However, the Comptroller noted that the delay in these processes limits the ability to investigate the facts and establish responsibilities.

The fifth finding relates to deficiencies in personnel files. The audit determined that multiple documents lacked signatures, dates, and other essential information, which weakens controls over payroll payments and leads to the commission of irregularities. The administration indicated that this situation was corrected and that instructions have been given to the corresponding personnel.

The report also includes a special comment on civil lawsuits pending resolution, both against and in favor of the Municipality, which represents possible future fiscal risks.

As a result of these findings, the OCPR issued recommendations directed at the secretary of the Treasury, the president of the College of Engineers and Surveyors of Puerto Rico, the Office of Management and Budget, and the mayor of the Municipality. Among the recommended measures, the recovery of funds paid improperly, the strengthening of quotation processes, the effective supervision of contracts, the correct withholding of taxes, the timely obligation of funds, the improvement in property controls, and the correct documentation of personnel files stand out.

The Comptroller reiterated that sound public administration demands effective controls, strict compliance with the law, and continuous supervision in all operational areas. The complete report is available on the official page of the OCPR www.ocpr.gov.pr.