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The Valencian regional audit office has identified serious weaknesses in Orihuela City Council’s accounting, treasury operations and public procurement procedures following an examination of its 2024 finances.
The Sindicatura de Comptes warned that poor financial controls could affect the accuracy and reliability of council transactions. Its report highlights unresolved discrepancies from previous years, unexplained cash balances, unaccounted cash advances and the possible existence of money that was neither recorded nor properly monitored.
Auditors described the risk surrounding the custody and integrity of public funds as “high”. They found that cash collected at some municipal payment points may not have been entered into the accounts. Until at least March, the council was reportedly not adequately monitoring these operations.
The total amount collected through cash payments or card terminals for municipal fees and public services remains unclear. The report also found no evidence that the council had established proper procedures to supervise this income.
Auditors were unable to establish the origin or breakdown of €2.33 million recorded as “payments pending application”.
Serious concerns were also raised about procurement. In contracts awarded through open procedures, the council did not always provide sufficient justification for its selection criteria or special performance conditions. The formulas used to score bids were also inadequately explained.
The report identified signs that numerous contracts may have been improperly divided into smaller agreements. Auditors said these services should instead have been combined and awarded through standard open, restricted or negotiated procedures.
Particular attention was given to a contract covering sports staff, assistants and maintenance workers at municipal sports facilities. It was processed as an emergency contract, although auditors concluded that the legal conditions required to justify an emergency procedure had not been met.
The controversial contract, worth €14.1 million over three years, took effect in November 2025 and represents one of the council’s largest spending commitments during the current term.
Invoices frequently lacked the required description or detailed breakdown of the services provided. The council was also urged to approve invoices more quickly because its average payment period exceeded the legal limit.
The audit noted that the municipal budgets for both 2024 and 2025 were approved after the statutory deadline. During 2024, budget amendments totalling €60.81 million increased the original €140.53 million budget by approximately 43%. This included €46.28 million drawn from treasury reserves.
However, spending levels were extremely low in some areas. Only 0.7% of sampled extraordinary credit allocations and 9.1% of supplementary credits were implemented. Auditors recommended improving budget planning so that spending forecasts more accurately reflect projects that can realistically be completed.
The 2024 budget breached spending and stability targets, yet the council did not approve the legally required economic and financial recovery plan. The 2025 budget, however, complied with stability, expenditure and debt limits.
Municipal financial controllers issued 73 formal objections that temporarily halted files during 2024. All were later lifted by mayoral resolutions. The report said most involved contracts concluded outside established legal procedures.
The Intervention post suffered instability. During 2024, the permanent official held the position for only six weeks. The role was subsequently filled by another nationally qualified officer and three council employees acting temporarily. The permanent controller did not return until March 2026, following repeated interim appointments.
Internal oversight was weakened further by frequent temporary appointments, staff shortages and insufficient separation between accounting and auditing duties. Treasury functions were also judged ineffective, with no cash-flow plans or general rules governing the custody and collection of municipal funds.
Mayor Pepe Vegara, who is directly responsible for the day-to-day Finance and Treasury portfolio, approved an action plan on July 3 setting out measures intended to correct the weaknesses, errors and legal breaches identified by auditors.
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