The Office of the Comptroller of Puerto Rico issues a partially adverse opinion on, among others, the management and control of the operating budget, the contracting of professional services, and the construction of permanent works and improvements in the Municipality of Loíza.
The Report reveals accumulated deficits from 2012 to 2015 of $5, $4.9, $6, and $8 million respectively. The deficit recorded in 2015 of $8 million constituted 75% of the deficit in the Operating Fund. For those fiscal years the Municipality also overestimated revenues from license taxes, the IVU, and excise taxes by 17%, 49%, 54%, and 43% respectively. The then Mayor and the Finance Director did not efficiently administer the Municipality's finances, and overestimating local revenues caused the budgetary deficits.
The eight-finding audit notes that expenditures in Loíza exceeded revenues by $5.1 million and the Cash Flow Report reflected overdrafts of $171,679 in 17 funds. Overdrafts in funds and in budget items contribute to falling into deficits and creating undesirable and precarious fiscal situations.
The Municipality formalized a loan with the Government Development Bank for $1.9 million in 2012, which it reprogrammed in 2014 to pay $1 million owed to the Municipal Revenue Collection Center and to the Internal Revenue Service (IRS). In addition, as of December 31, 2015, it owed $957,136 to the Department of Treasury, AEELA, General Services, and the IRS from money that was deducted from employees in their payrolls but not remitted to those entities. These situations worsen the Municipality's borrowing margin and prevent employees from having access to the benefits to which they are entitled.
Contrary to Act 81-1991, the Municipality paid for goods and services for $62,438 without obtaining the required quotes from at least three suppliers representative of the market, and six contracts for $199,892 were formalized for construction without the Finance Director obligating the budgetary credits for the payment of the contracts. In addition, 17 disbursement vouchers and their supporting documents for $72,794 were not found for examination.
The Report comments that in the financial statements from 2012 to 2014 disbursements of $64,261 made against the federal funds of the Community Development Block Grant were questioned. In addition, as of July 8, 2015, the Municipality had not recovered $272,029 as recommended in Audit Report M-14-31 of 2014.
The Report covers the period from September 1, 2012 to December 31, 2015 .
See Audit Report M-18-02
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