The Office of the Comptroller of Puerto Rico issues a partially adverse opinion on the fiscal operations of the Municipality of Gurabo related to the management and control of the operational budget, the purchase of goods and services, property, collections and municipal accounting.
The Report reveals that the Municipality made disbursements of $9.1 million for operational expenses from 2013 to 2016, improperly using the funds from the income of the prepaid licenses for the years 2014 to 2017. This situation, contrary to Act 81-1991 of Autonomous Municipalities, fosters incurring budgetary deficits.
In fact, Gurabo had deficits of $7.5, $11.3, $6.4 and $7.6 million from 2013 to 2016 and overdrafts of $10.3 million as of June 30, 2016. In this regard, the Report comments that operating with deficits affects services to citizens and that overdrafts in the funds create an undesirable and precarious fiscal situation for the Municipality.
The eight-finding audit notes that the Municipality formalized two loans with the Government Development Bank for $2.4 million to pay debts accumulated with governmental and private entities. In particular, the debt of $341,230 with the Retirement System and the Employees Association of the Commonwealth accumulated because, contrary to the applicable law and regulations, the Municipality did not remit the employees' payroll deductions, nor the contributions and payments it was obligated to make.
Our auditors identified that the then mayor spent $32,377 in two years on nine trips to countries such as Japan, Korea, China, Argentina and Italy, for which he did not submit reports of the steps taken. In addition, the examination of the $52,000 charged to the official credit card reflected expenses without the certifications on the nature and necessity, without disbursement vouchers or supplier invoices.
Contrary to the applicable law and regulations, the Municipality acquired equipment for recreational areas for $343,655 without holding a public bid and purchased goods for $23,690 without obtaining the three required quotations. These situations prevent free competition and foster irregularity in disbursements.
The audit evidences multiple deficiencies such as transfers of credit between line items without the required surplus certifications, lack of documents in the donations to nonprofit entities, or the $274,709 in special funds that had remained inactive for more than three years.
The Report comments on the judicial process and summary suspension of employment and salary against the former mayor accused of alleged bribery and attempted extortion and obstruction of justice. It also indicates that the Municipality has not addressed the recommendation of Audit Report M-13-05 of 2012 to recover $122,704 and that as of December 31, 2016, seven lawsuits for $5.1 million were pending resolution in the courts.
The Report covers the period from January 1, 2013 to December 31, 2016 and is available at www.ocpr.gov.pr.
See Audit Report M-18-19.
To see other published reports, visit our Audit Reports section.
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