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Comptroller reveals audit findings in the Municipality of Quebradillas for improper payments, irregular contracting and administrative deficiencies

Report identifies payments of more than $922 thousand related to contracting that failed to meet legal and regulatory requirements

San Juan, Puerto Rico – (June 8, 2026) The Comptroller of Puerto Rico, Attorney and CPA Carmen A. Vega Fournier, disclosed today the results of a compliance audit conducted of the Municipality of Quebradillas, in which multiple deficiencies were identified related to government contracting, purchasing processes, the administration of public documents and the control of municipal property.

The audit covered the period from February 1, 2019 to December 31, 2023 and issued a qualified opinion, concluding that the operations examined were carried out in conformity with applicable laws and regulations, except for the six findings included in the report.

“Public resources must be administered with the highest level of responsibility, transparency and adherence to the law. The situations identified in this audit demonstrate the need to strengthen internal controls and oversight mechanisms to adequately protect public funds and ensure sound government administration,” the Comptroller stated.

One of the most significant findings notes that the Municipality made payments of $513,233 in excess of the amount established in a contract for the acquisition of plant-collected asphalt. Although the contract executed in September 2022 established a maximum amount of $15,000, the Municipality subsequently issued purchase orders and made payments totaling $528,233 without formalizing a contractual amendment authorizing the increase of the originally agreed amount.

The audit determined that this action failed to comply with the requirements applicable to government contracting, which require that any substantial modification of a contract, including increases in the amount, be formalized in writing through a prospective amendment before making the corresponding disbursements.

On the other hand, the Office of the Comptroller of Puerto Rico (OCPR) identified that the Municipality disbursed $409,689 for installation, maintenance and repair services for air conditioners to a corporation whose principal officer did not hold the license required by the Act of the Examining Board of Refrigeration and Air Conditioning Technicians.

The investigation further revealed that two persons subcontracted to perform specialized work also did not hold the aforementioned license. The audit concluded that the Municipality did not adequately verify compliance with these requirements before formalizing contracts and issuing purchase orders.

“Municipalities have the responsibility to ensure that contractors comply with all licenses, permits and certifications required by law and regulation before contracting their services. This requirement exists precisely to guarantee that the work is performed by qualified and authorized personnel,” the Comptroller maintained.

The report also notes that the Municipality split the cost of road repaving work for municipal roads through two contracts for a total of $381,215, thereby avoiding the legal requirement to hold a formal public bid. According to the audit, both contracts corresponded to similar work performed during the same fiscal year and with funds available at the time of award.

The OCPR concluded that this practice limited free competition and deprived the Municipality of the opportunity to evaluate a greater number of proposals to select the alternative most beneficial to the public interest.

Likewise, the auditors determined that the improvement works to the Municipal Public Plaza began without having the construction permit required by the Permit Management Office (OGPe). The permit was obtained 304 days after the start of the work, failing to comply with the legal and regulatory provisions that require prior authorization for construction projects and permanent improvements.

The audit also identified significant deficiencies in the purchasing processes. Among these, it was found that the Municipality made purchases of $31,868 without obtaining the minimum quotes required by law; the lack of identification of the personnel who requested, received and accepted quotes; and the identification of particular brands and models in purchases financed with federal funds, limiting competition among suppliers.

Regarding the administration of public documents, the report notes that the Municipality lacked written regulations and procedures for the handling, preservation and disposal of official documents. In addition, deficiencies were identified in the areas used to store documents, including humidity, deterioration, lack of organization, insufficient ventilation and absence of fire protection systems.

The audit also revealed that the Municipality did not conduct the annual physical property inventories corresponding to five consecutive fiscal years in most of its units, a situation that increases the risk of loss, misuse or disappearance of municipal assets.

As part of the special comments included in the report, the OCPR reported that the Municipality made payments of $161,719 related to labor claims and litigation filed by municipal employees, including a determination issued by the Public Service Appeals Commission and a settlement agreement to resolve a civil lawsuit.

In addition, at the close of the audited period, four civil lawsuits against the Municipality for approximately $1.13 million remained pending, as well as an additional case before the Public Service Appeals Commission.

Among the recommendations issued, the OCPR urged the Municipality to recover the funds disbursed in contravention of the applicable regulations, strengthen the controls related to government contracting and purchasing processes, ensure the obtaining of permits before initiating construction projects, establish adequate procedures for the administration of public documents and conduct the physical property inventories as required by current regulations.

“The recommendations issued are intended to correct the deficiencies identified and to have a sound public administration in the municipal management to prevent the recurrence of similar situations in the future. Transparency and accountability continue to be fundamental pillars for effective and responsible public management,” concluded the Comptroller.