Audit identifies irregularities in leave payments, public works contracting, financial audits and appointments in the Municipal Police
San Juan, Puerto Rico – (June 22, 2026) The Comptroller of Puerto Rico,
Attorney and CPA Carmen Vega Fournier, reported today the results of a compliance audit of the Municipality of San Germán, which revealed multiple deficiencies related to improper payments, contracting processes, administrative management and compliance with requirements in municipal appointments.
The audit covered the period from July 1, 2021 to December 31, 2024 and concluded with a qualified opinion due to five findings related to the Municipality’s fiscal and administrative operations.
“Municipalities administer public resources that are essential to the functioning of communities. For that reason, it is indispensable that their fiscal, administrative and human resources operations be conducted in strict compliance with the law, with transparency and with effective internal controls,” said Comptroller Vega Fournier.
The report details that the tests performed by the Office of the Comptroller reflected non-compliance related to improper payments for accumulated sick leave, the execution of a contract without the required bonds, delays in financial audits, deficiencies in the minutes of the Bidding Board and appointments of an official and an employee who did not meet the minimum requirements established by law.
One of the principal findings identified corresponds to the improper payment of accumulated sick leave to former municipal employees and officials.
The audit revealed that, between January 2021 and November 2024, the Municipality disbursed approximately $876,629 for the settlement of accumulated vacation and sick leave to 182 former public servants. As part of the examination, the Office of the Comptroller evaluated 20 payments totaling $24,864 and determined that the Municipality paid, without legal authority, 237 days of sick leave accumulated in excess of the 90-day limit permitted by law.
According to the report, these improper disbursements resulted in payments of $24,864 that could have been used to address other municipal needs. The audit attributed the situation, among other things, to Human Resources officials departing from the provisions of the Municipal Code and from their administrative duties.
In his comments, the mayor maintained that some of the settlements were authorized by the previous administration and argued that the Municipality relied on a municipal ordinance authorizing payments related to excess sick leave. Nevertheless, the Office of the Comptroller determined that the finding stands, since the Municipal Code allows the payment of excess accumulated vacation leave, but not of sick leave in excess of 90 days at the time of separation from service.
Another important observation of the audit was the execution of a $1 million contract for asphalt overlay and surface scarification work without obtaining the performance bond and the bond for payment of labor, equipment and materials.
The audit determined that neither the municipal officials nor the contractor were able to provide evidence of the bonds required to guarantee contractual compliance. According to the report, this situation deprived the Municipality of the guarantees necessary in the face of possible non-compliance related to the project.
In his comments, the mayor indicated that it was an involuntary error and noted that, as a corrective measure, a process was implemented to require and verify all documents and guarantees before executing future contracts.
The Office of the Comptroller also identified deficiencies related to the contracting of audit services for the Municipality’s financial statements and delays in the submission of reports required by federal regulations.
The report notes that four contracts for external audits were awarded between 13 and 146 days after the dates established by law. In addition, the audited financial statement corresponding to fiscal year 2021-22 was submitted 90 days late to the Federal Audit Clearinghouse (FAC).
The audit concluded that these situations may affect the availability of updated financial information for decision-making and potentially impact the allocation of federal funds to the Municipality.
In response, the mayor argued that the delays were related to the federal extensions granted following the impact of Hurricane Fiona. However, the Office of the Comptroller maintained that the finding stands because the audited report was submitted outside the term granted.
Another relevant finding corresponds to deficiencies in the minutes of the Bidding Board.
The audit revealed that, of 77 meetings held by the Board between May 2022 and July 2024, the minutes of 39 meetings had not been transcribed at the time of the examination carried out by the auditors.
The Office of the Comptroller noted that this situation makes it impossible to maintain complete and reliable records of the Board’s decisions and awards and, in addition, hinders the official binding of the minutes in book form as required by law.
In its comments, management indicated that it completed the transcription and binding process corresponding to fiscal year 2022-2023 and that it continued working on the minutes for fiscal year 2023-2024.
Likewise, the audit identified irregularities in appointments within the Municipal Police.
The report notes that an official appointed as commissioner of the Municipal Police and an employee appointed as inspector did not meet the academic and experience requirements established by law and in the municipal classification plans.
In one of the cases, the official received more than $90,000 in salaries and salary differentials during the period examined.
The mayor defended the commissioner’s appointment, arguing that his experience as a ranger with the Department of Natural and Environmental Resources (DRNA) and his training at the Puerto Rico Police Academy met the alternative requirements established by law. However, the Office of the Comptroller determined that the finding stands, concluding that the legal definition of “officer” did not include the position of DRNA ranger and that the official did not meet the requirements for the post.
As a result of the findings, the Office of the Comptroller issued multiple recommendations directed to the mayor, the president of the Municipal Legislature and the Office of Management and Budget. These include the recovery of the improper payments, strengthening contracting processes, guaranteeing the timely contracting of external auditors, complying with the federal deadlines for the submission of audits and properly evaluating the requirements for municipal officials and employees before their appointments.
“Compliance with fiscal controls, contracting processes and human resources requirements cannot be seen as a mere administrative formality.
They are fundamental mechanisms for protecting the public interest, guaranteeing sound government administration and strengthening public trust”, the Comptroller added.
The Municipality of San Germán operated with General Fund budgets ranging between approximately $13.5 million and $14.5 million during the fiscal years audited. In addition, its financial statements reflected accumulated surpluses in the years examined.
“Fiscal and administrative responsibility requires continuous supervision, strict compliance with the law and an institutional culture oriented toward transparency and accountability”, concluded Vega Fournier.
Audit Report OC-26-38 can be obtained on our website: www.ocpr.gov.pr.
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