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The Office of the Comptroller of Puerto Rico issues a partially adverse opinion on the fiscal operations of the Municipality of Maunabo related to the management and control of the operating budget, loans and debts, collections, and municipal accounting.

The Report reveals accumulated deficits in the Operating Fund of $3.2, $3.5, $1.9, and $1.3 million from 2012 to 2015 respectively, and during that period the Municipality paid $74,055 in bank charges for checks paid without funds. In addition, the Monthly Report of Income and Disbursements as of June 30, 2015 reflected overdrafts amounting to $185,165 in the Operating Fund.

Similar situations had been noted in Audit Report M-14-28 of February 12, 2014.

The eight-finding audit notes that the Municipality borrowed $6.7 million from the Government Development Bank to pay its debts with the government and suppliers, cover deficiencies, and for financing costs. It owed $1.7 million to the Internal Revenue Service (IRS) alone. These situations, which had also been noted in the 2014 Report, worsened the fiscal situation and borrowing margin of Maunabo.

Our auditors identified situations of lack of control in credit transfers that, contrary to the law, were authorized without the required surplus certifications and without the Finance Director detailing the budgetary appropriations. In addition, the Legislature of Puerto Rico assigned it $2.7 million that, contrary to the law and as a loan, was transferred to other accounts.

The Report shows that the Municipality's accounting was not up to date or reliable, and as of June 30, 2015 it maintained bank accounts inactive for more than five years with balances of $289,272. As of that date, five civil lawsuits for $512,243 were pending resolution by the Courts.

The Report covers the period from January 1, 2012 to June 30, 2015.

See Audit Report M-18-06

To view other published reports, visit our Audit Reports section.