THE Commonwealth Utilities Corp. may be again required to return to the U.S. Department of the Interior portions of an estimated $300,000 CUC paid to a local contractor for a wastewater upgrade project.
A report by the Office of the Public Auditor yesterday confirmed the Office of Insular Affairs’ finding that the costs paid to Juan C. Tenorio & Associates resulted in the “disallowance” of $204,000 in project costs.
This consists of $57,000 in missing or unlocated equipment; $60,000 worth of change orders without government approvals; and $87,000 in lost project costs.
CUC spokeswoman Pamela Mathis said in a telephone interview that the utilities agency paid half or $150,000 of the $300,000 upgrading project, while OIA paid the remaining portion.
Interior earlier required CUC to return $230,000 for a defaulted Rota project.
Mathis said JCTA defaulted on the project, prompting CUC to hire Winzler & Kelly.
“We informed OIA of that default and as a result, OIA conducted an audit on JCTA to find out who pays what and what portion,” Mathis said.
She said CUC’s legal counsel is pursuing claims against JCTA for the $150,000 that the utilities agency earlier paid to it.
Public Auditor Mike Sablan, in the report, said it also appears that due to confusion concerning the interplay between federal and CUC regulations, “CUC did not follow the procurement procedures set forth for solicitation of A&E services specified in their regulations.”
OPA said CUC instead followed procedures for competitive sealed proposals.
OIA’s calculation on the lost value worth $87,000, however, does not credit CUC for the items it seeks to disallow in calculating how much to credit against CUC for payments made to JCTA, OPA said.
It would now be up to OIA to determine the final disallowed costs that must be reimbursed to the federal government, OPA said.
Based on OPA’s report, JCTA received payments totaling $253,728 from its contract.
Of this amount, $78, 779.93 pertains to equipment purchased that cannot be located by CUC, reimbursements for purchases and other expenditures not specifically authorized in JCTA’s contract, and additional work on the project never approved.
Mathis said CUC could not locate one of the two portable flow meters purchased in connection with the project.
