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Comptroller notes failures in contracting processes at the AAA

San Juan, Puerto Rico (August 20, 2026) – The Comptroller of Puerto Rico, CPA and Attorney Carmen Vega Fournier, published today Audit Report OC‑27‑24 concerning the Puerto Rico Aqueduct and Sewer Authority (AAA), covering the period from July 1, 2020 to June 30, 2024.

The audit, with a qualified opinion from the Comptroller, notes two significant findings related to the contracting and management of professional services in the Customer Service, Water Recovery (ORA) and Non-Revenue Water Recovery (ORANF) offices.

One of the findings notes deficiencies in the formalization and administration of professional and consulting services contracts. The Report details that the AAA awarded two contracts for more than $9.6 million for services related to revenue optimization, pressure management, leak detection and operational support, without carrying out the analysis required to determine whether the contracted services corresponded to the duties of regular positions within the entity. In addition, it was shown that some of the contracted personnel performed duties similar to positions contained in the Classification and Compensation Plan, and even worked hours equivalent to those of regular employees, which contravenes the applicable rules. Deficiencies were also identified in the determination of expertise and an absence of specific information on the duties of the personnel assigned to the contracts.

The Report warns that these deficiencies resulted in additional costs, including payments for services that could have been performed by properly trained internal personnel. It was noted that some contractors continued performing duties on an ongoing basis for periods of between 4 and 16 years, a characteristic typical of regular positions and not of professional services contracts. Likewise, it was identified that the AAA did not carry out economic analyses justifying the advisability of contracting, contrary to what is required to ensure the effective use of public resources.

Another of the findings reflects an absence of transfer of technical knowledge to the Authority's personnel, even though the contract of July 5, 2022 established the obligation to transfer the skills required for pressure management, leak detection and other essential tasks. The evaluation revealed that the director of the ORA, who is an AAA employee, is the person who has trained the contracted personnel for that Office ever since the contractor began providing these services at the AAA. In addition, it was identified that several of the contracted services were recurring and not specialized, and could be performed by properly trained government personnel. The absence of knowledge transfer affects operations, encourages dependence on external contracts and represents a loss of critical capabilities for the AAA.

AAA management submitted comments defending the necessity of the contracts and their compliance with the applicable rules; nevertheless, the findings prevail, since the evidence gathered demonstrated significant deficiencies in the evaluation, approval and administration of the contracts examined.

The report includes recommendations addressed to the Governing Board, the executive president of the AAA and the director of Human Resources, among them:

• conduct studies to determine whether the contracted services constitute duties of regular positions;

• require the information and documentation necessary to evaluate the proposals, and the expertise necessary for the contracted services;

• carry out economic analyses assessing the advisability and necessity of contracting external personnel;

• ensure compliance with the obligation to transfer technical knowledge to AAA personnel.

The Comptroller urged AAA officials and employees to comply with the applicable rules and to promote the effective, efficient and ethical use of Government resources. "A sound public administration depends on the continuous strengthening of internal controls and on adequate oversight of professional services contracts," reiterated Vega Fournier.

Audit Report OC‑27‑24 is available at ocpr.gov.pr.