The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Luis A. Ferré Performing Arts Center Corporation (CBA). A qualified opinion is issued when noncompliance, individually or in the aggregate, is significant but not pervasive.
The Report reveals that the Performing Arts Center's Standards for the Leasing and Use of the Facilities lack several specific provisions on the evaluation of the lessee's financial capacity or on the process that ushers must carry out with the tickets. In addition, the Accounting Manual also lacks specific provisions on the collection process. These situations do not allow the CBA to have guidelines to carry out the functions related to the handling and control of the lease contracts and the collection efforts.
The seven-finding audit notes that the assembly plans and technical work plans required by the regulatory procedures could not be located for examination. The rehearsal coordinator certified that she could not provide the documents requested for three events that took place from 2016 to 2018. This situation deprives the CBA of validating compliance with the regulations for this type of contract.
The CBA failed to receive $25,388 by not undertaking collection efforts against two companies contracted for ticket sales. In addition, none of company B's sales reports included payment receipts as established by the Accounting Manual.
The Comptroller's auditors identified multiple deficiencies in the lease of the Pabellón de las Artes. For example, upon signing the contract, the CBA did not require the company to pay the bond or the lease bond. Nor did it ensure that the businessman kept the public liability insurance in force.
From 2015 to 2018, the CBA filed, up to four months late, 18 contracts and three amendments in the Registry of the Office of the Comptroller. In addition, it did not remit to the Office of the Comptroller copies of the audited financial statements or the management letters for the years 2013, 2015 and 2016, as provided by Act 273-2003 on Contractual Standards on Independence in the Audits of Governmental Entities.
The audit found, for the audited period, that 19 monthly meetings of the Board of Directors were not held, as provided by the Internal Regulations (By-laws). In fact, the Board had not incorporated regulatory provisions into the by-laws such as the signing, preparation and filing of the minutes or the use of the corporate seal.
The Report covers the period from July 1, 2013 to December 21, 2018
See Audit Report CP-20-06.
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