The Office of the Comptroller of Puerto Rico issues a partially adverse opinion on the management and control of the operating budget, the contracting of engineering services, the credit transfers, and the purchases without bidding or quotations of the Municipality of Manatí.
The Report reveals that as of June 30, 2015, the Municipality was overdrawn by $11.9 million and also had accumulated deficits in the operating fund of $11.2 for 2013, $10.7 for 2014, and $9.5 for 2015. Operating with deficits adversely affects services to citizens. Similar situations had already been noted in Audit Report M-15-10 of 2014.
Contrary to the current legal framework, the Municipality contracted a regular corporation for $53,719 to provide engineering services related to the inspection for the remodeling of the Los Tubos beach resort. This situation was referred to the Department of Justice and to the College of Engineers and Land Surveyors of Puerto Rico on September 28, 2016, since the services requested could only be offered through the legal form of a professional corporation.
The 10-finding audit indicates that the then-mayor and the Municipal Legislature authorized 492 credit transfers for $12.2 million without the Finance director issuing the required surplus certifications. In addition, services were rented without obtaining at least three quotations, officials outside the General Services Department processed 10 quotations, and the private citizen who is part of the Bidding Board was absent from 89% of the meetings.
The Municipality carried out several constructions without obtaining the corresponding permits. For example, it built a pineapple-packing building for $356,000 that is empty except for an office that is in use even though it does not have the permit from the Permit Management Office (see photos in Appendix 1). In addition, the municipality built a basketball court in the Monte Verde Subdivision contrary to the recommendations to carry out a soil study due to the riskiness of the terrain and without the consent of the Electric Power Authority (see photos in Appendix 2).
The Report indicates that $37,500 was paid to corporation A which failed to perform contracted work. To that effect, the Municipality contracted corporation B for $37,500 to provide the services that Corporation A failed to perform. This situation of paying for work not performed is contrary to the contract with Corporation A and to Act 81-1991.
Our auditors identified multiple deficiencies with the collections and the operation of a summer camp, delays of up to 12 months in the preparation of bank reconciliations, and uncollected charges for the rental of recreational facilities. In addition, the municipality maintained balances of $50,697 in six bank accounts of special programs that had been inactive for periods of up to 81 months. This situation hinders municipal accounting and deprives the Municipality of economic resources that it could use for other needs.
The Report covers the period from January 1, 2013 to June 30, 2016.
See Audit Report M-18-15.
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