The irregularities in the use of mining royalties caused the Court of Auditors of Catamarca to request instruction for "administrative inquiries of responsibility" for several municipalities in the province, to determine "the damage to public finances."

One of those districts was Icaño, from the department of La Paz, 271 kilometers from the provincial capital. There the watchdog noted that funds from mining royalties were used to renovate the property of the local Riding Club for tourism. The problem was that in the purchases linked to the project the ownership of the property was included, there the Race Commission "chaired by Madam. Municipal Mayor." The technicians clarified that according to the municipal and communally organic law, the Chief Executive cannot run both a civil or commercial association that is directly or indirectly linked to the district for administrative contract. Despite this limitation, Icaño performed the work detailed in invoice "B" number 0001-00000782 under the name "El Horizonte" for: an archway, a small home for a night security guard, a barbecue grill, stables, grandstands and a house for caregivers, for $58,305.80. The project also indicates that the total investment for the Equestrian Club is $ 92,290.

Moreover, the report of the Court of Auditors of Catamarca, approved last year based on 2007 data, indicated that in different districts the law regulating mining activity, 5128, was breached, just as in Icaño, they also received an order of administrative proceedings.

In the Municipality of Puerta de Corral Quemado, for example, “salaries to the personnel hired cost $1,282,293.21 and were paid as current expenses," say the auditors and add that, precisely, that is one of the destinations that may not have mining royalties as required by Article 5 of the 5128 Act, which says the money will be applied "solely" to finance infrastructure and training for productive activities, while prohibiting finance for current expenditures and give and guarantee loans.

Five years ago it was decided in the 5551/05 that districts must notify the Court of Auditors in which project funds from mining would be used before they are executed. But in the town of Los Varela money will be invested in two startups that were not communicated to the watchdog, "which does not confirm whether the objective (of works) meets those specified" in the law.

Moreover, these two works have other shortcomings. It is, on the one hand, the system of home drinking water for the town of Humaya. In this case, although the work did not include the payment of project development, i.e., professional fees, they ended up paying $29,491.80 for that concept. And so it was, on the other hand, with the renovation of the Cultural History Museum El Bolson in the department of Ambato, but for $38,760.

In the town of Puerta de San José it was discovered that "there are no written records of the total works completed with mining royalties or the entire administrative process, therefore there is no way to establish were the investments fall in the projects implemented by the municipality". Thus, the Court was "unable to assess" whether Puerta de San José has adjusted to the provisions of the Mining Act.

A little further south, in the town of Capayán, auditors highlighted the "existence of a balance of funds from mining royalties not invested refunded to the account" in which the district has the money. They are $ 110,523 and, considering that "in each period (analyzed) extractions and partial refunds are registered to that account -which are piling up- it is impossible to determine if all that was extracted was fully reinstated."

Another town which was inquired was Belén, where $6,828,587 were paid to enterprises that were not reported to the Court of Auditors of the province and, therefore, "could not verify whether this expenditure is within approved projects to spend funds from mining royalties," says the report. In that district, the auditors noted that, in the composition of the balance of the current account made by December 31, 2007, there was a "shortage of funds and / or payment amounts totaling $1,177,303.29". For the watchdog, "this is considered embezzlement."