The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Cidra related to the award, contracting, and payments for the administration and operation of the Treasure Island Inn Hotel. A qualified opinion is issued when the noncompliances, individually or in the aggregate, are significant but not pervasive.
The Report revealed that the corporation that temporarily operated the Treasure Island Inn Hotel through a $210,000 contract in 2013 lacked the capacity and experience to provide the required services. Neither the Municipality nor the Municipal Legislature evaluated the contractor's capacity and experience prior to the contracting.
This situation caused Cidra to pay $25,995 in excess of what was established in the amendments to the original contract for reimbursement expenses. In addition, it did not require evidence from the corporation, nor did they provide it, of the $39,295 paid in fringe benefits to the Hotel's employees.
The five-finding audit also notes multiple internal control deficiencies. For example, the Municipality lacks a regulation for the administration and operation of the Hotel, for the audited time the deposits of $246,397 recorded in the bank statements were not verified against the copies of the receipts and reconciliations delivered by the corporation, and equipment acquired for $3,015 was not recorded in the property inventory. The absence of a regulation caused the deficiencies in the Hotel's operations and could lead to irregularities in the operations.
The Report comments that from 2011-12 to 2013-14, Cidra had accumulated deficits in the Operational Fund of $1.1, $1.8, and $1.8 million, respectively, as reflected in the financial statements. Operating with a deficit does not foster a policy of savings and does not allow honoring the commitments and obligations incurred with creditors.
This is the second report of Cidra and covers the period from January 15, 2013 to December 31, 2015.
See Audit Report M-19-24.
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