The Office of the Comptroller of Puerto Rico issued a qualified opinion on the maritime operations of the Ports Authority of Puerto Rico. A qualified opinion is issued when noncompliance, individually or as a whole, is significant but not pervasive.
The Report reveals that the Authority issued collection invoices without validating the information on the quantity and description of the merchandise provided by the shipowner in the cargo manifest or in the amended manifests. Our auditors detected that the Authority relies on the data provided by the shipowner.
This situation does not allow for adequate control of the billing of the charges for wharfage. In addition, the executive directors did not prepare written standards and procedures to ensure the accuracy and correctness of the charges billed.
The five-finding audit notes that the Authority did not provide for examination fiscal documentation on manifests and overtime requests. In addition, contrary to current regulation, none of the forms for the approval of employees' overtime was signed by the captain of the vessel or the shipping agent.
The Report reveals that, since 2001, two shipping companies have occupied office space at pier 10 of Puerta de Tierra in San Juan without having a formalized contract and without paying rent. In addition, at piers 9 and 10 no inventory is taken of the merchandise stored while awaiting pickup by the vessels. Our auditors observed that the merchandise was disorganized, without protection, and the food, materials and electronic equipment exposed to the elements.
Contrary to regulation, the Authority's Credit Committee did not comply with the provision to establish a credit limit for customers when it approves applications. Six credit accounts were examined and we found that the credit limit was not established in four. This situation prevents the Authority from monitoring customers' credit and ensuring that the accounts are not overdrawn.
The audit identified multiple deficiencies in collection efforts. For example, since 2008, monthly account statements are only sent to customers who request them, the agency's collector did not make the collection calls as provided by the regulatory procedure, nor were customers referred to collection agencies or to the legal division for eviction.
In addition, the Authority eliminated 16 accounts declared uncollectible from the accounting records that total more than $1 million. From a sample of seven accounts, our auditors detected that the referral of these to the legal division to perform collection was made up to 15 years later. Moreover, some of the accounts had already prescribed, for which reason the Authority failed to have economic resources of $946,631, among others.
This third report on the Ports Authority covers the period from July 1, 2012 to June 30, 2018.
See Audit Report CP-19-05.
To see other published reports, visit our Audit Reports section.
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