The Office of the Comptroller of Puerto Rico issues a partially adverse opinion on the fiscal operations of the Municipality of Morovis.
The Report reveals accumulated deficits in the Operational Fund of $3.7, $1.5, $1.5 and $1.1 million from 2012 to 2015 respectively. In addition, in 2012 it overestimated revenues by 32%, a fact that contributes to incurring deficits. A similar situation had been noted in Report M-14-45 of 2014.
The audit indicates that the Municipality ordered the demolition and construction of a building for the use of health services in 2010 and the construction of a basketball and volleyball court in the Pueblo ward in 2013, both for $1.1 million, but without the construction permits from the Permit Management Office. In fact, the municipality paid $30,000 to the architect in charge of preparing the plans for the courts but these were of no use. Some of the defects found in the process were that the designed courts did not fit in the available space since the architect did not take into account the measurements of the lot; nor did he prepare plans for electrical, sanitary, potable or storm-water connections, nor for the entrances and sidewalks, among others.
The 13-finding Report notes that for not remitting on time the payroll deductions of the employees to Federal Social Security, the Municipality had to pay $342,789 in interest, surcharges and penalties to the Federal Internal Revenue Service (IRS). This situation reduced the Municipality's economic resources and could have prevented the employees from accessing the benefits.
Our auditors identified the purchase of goods and services without obtaining quotations, the payment of three mechanic services without obtaining the proposals required by law, delays of up to 12 months in the preparation of bank reconciliations and multiple deficiencies with collections.
The audit further comments on irregularities in the billing of the fuel dispensing services by an employee of a private gas station. The Municipality had an interagency agreement with the General Services Administration for the acquisition of gasoline. The Internal Audit Unit detected the possible illegal appropriation of funds with the use of electronic cards in the acquisition of fuel and the then mayor referred said report to the Department of Justice in 2015. The examination by the Institute of Forensic Sciences, at the request of the Office of the Comptroller, concluded that an employee of the gas station was the author of the forged signatures on 46.3% of the fuel purchase receipts analyzed and very probably also of 51.7% of the receipts, that is, of 98% of the receipts examined. This situation was referred to the Secretary of Justice on October 6 and as of the date is in the process of investigation.
The Report covers the period from July 1, 2011 to June 30, 2015.
See Audit Report M-17-30.
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