Press Releases

Comptroller of Puerto Rico reveals improper payments, administrative deficiencies, and fiscal risks in audit of the Municipality of Barranquitas

San Juan, Puerto Rico — (April 21, 2026) The Comptroller of Puerto Rico, Attorney Carmen A. Vega Fournier, CPA, announced the results of Audit Report OC-26-20 of the Municipality of Barranquitas, which covers the period from July 1, 2019 to June 30, 2024.

The report contains a qualified opinion, having determined that, although the Municipality's operations were carried out in general terms in accordance with the applicable law and regulations, findings were identified that evidence deficiencies in the handling of public funds, legal compliance, and internal controls.

Among the most relevant observations, the audit identified salary payments of $84,268 to a pensioner of the Teachers' Retirement System in contravention of the Teachers' Retirement System Act of 2013. The official was appointed to a confidential position while continuing to receive her pension, in violation of the legal provisions that require the suspension of said benefit when holding a remunerated job in the government.

Municipal management held that the appointment was made in accordance with an interpretation of Act No. 40 of 1959, which permits the partial employment of pensioners without impairment of their pension. Nevertheless, the Office of the Comptroller of Puerto Rico (OCPR) determined that the finding prevails, concluding that the legislation applicable in this case is the Teachers' Retirement System Act of 2013, which establishes a specific prohibition.

Likewise, improper payments of $13,500 were identified for artistic services that were not rendered. Although the Municipality argued that the artist incurred expenses and that the activity was interrupted by a blackout, the audit determined that the payment was not proper according to the contractual terms. Subsequently, the money was recovered through an out-of-court settlement reached in August 2025.

In the area of infrastructure, the audit revealed deficiencies in the execution of construction projects. It was determined that the Municipality began work without having the required permits in at least four projects, obtaining them with delays of up to 707 days. In addition, contracts were formalized without the contractors timely presenting bonds, State Insurance Fund policies, and public liability insurance, which exposes the Municipality to legal, financial, and administrative risks.

Deficiencies in budgetary management were also identified, in that budget credits were not obligated in contracts and amendments for $5,947,287 at the time of their granting, with said obligations being recorded with delays of up to 541 days. This practice weakens fiscal control and increases the risk of overdrafts and unnecessary litigation.

Regarding the administration of revenue, the audit evidenced the absence of analysis in accounts receivable exceeding $1.6 million, of which more than $1.2 million are more than five years old. In addition, deficiencies were detected in collection efforts, including a lack of evidence of follow-up with debtors, noncompliance in the verification of municipal license taxes, and the absence of business volume declarations in several cases.

Municipal management indicated that it has initiated processes to analyze uncollectible accounts, strengthen collection efforts, and improve the supervision of taxpayers. Likewise, it noted that instructions were given to ensure compliance with construction permits and the documentation required in contracts.

Finally, an evaluation of premises lease contracts between 2021 and 2023 for $123,000 revealed that the Municipality did not obtain rent studies or registry certifications in four contracts, and omitted the debt certification from the Department of Treasury in two cases. This makes it impossible to determine whether the lease fees were reasonable and to validate the legal right of the lessors over the properties, which exposes the Municipality to possible third-party claims and to risks related to liens or encumbrances. In addition, it may have contracted with lessors with tax debts.

As a result of these findings, the OCPR issued recommendations directed at the mayor and the administrative units of the Municipality, including the strengthening of internal controls, the recovery of funds paid improperly, the correct application of legal provisions in human resources matters, the prior obtaining of permits and guarantees in construction projects, and the establishment of effective mechanisms for the administration and collection of revenue.

“Public management demands strict compliance with the law, robust internal controls, and responsible administration of the people's resources,” expressed the Comptroller. The complete report is available on the official page of the OCPR www.ocpr.gov.pr.