The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Cabo Rojo. A qualified opinion is issued when the instances of noncompliance, individually or together, are significant but not pervasive.
The Report reveals that Cabo Rojo disbursed public funds for work not performed in the repair of vehicles and heavy equipment. Our auditors found at the Municipal Garage a truck and a digger that did not have installed the engines that had been sent for repair to a private mechanic in 2015. In fact, the parts and engine of the digger were in the mechanic's private shop, and the truck's engine was returned as soon as our auditors asked about it (see photos in appendix 1).
The audit, with six findings, points out that the Municipality purchased parts and repair services for vehicles and heavy equipment without obtaining at least three quotes from representative suppliers in the market. A similar situation had been noted in Report M-17-39 of 2016.
In addition, the Municipality took an excavator to a private shop in 2013 and a traxcavator to another private shop in 2016, both for repair. However, the Municipality decided against repairing them due to the high cost of the repair. Nonetheless, the municipal administration did not take the steps to retrieve both pieces of property from the shops, and over time they deteriorated, could not be repaired, and were in a state of abandonment (see photos in appendix 2). The original cost of both pieces of equipment in 1999 was $150,880.
Contrary to regulations, the Municipality did not request, nor did the supplier establish in writing, the warranties on the repair of 12 vehicles and heavy equipment. In addition, of a sample of the files, we found that 95% were incomplete, did not maintain a physical and perpetual inventory of the parts, did not prepare requisitions for their dispatch, and the physical protection of the inventory was inadequate.
The Report indicates that from 2015 to 2017, 36 vehicle accidents and five property losses occurred in Cabo Rojo, which were not reported to the Office of the Comptroller as the regulations require. In addition, for none of the accidents examined were administrative investigations carried out to determine whether there was fault, blame, or negligence in order to assign the corresponding responsibilities.
The audit notes that Cabo Rojo had budget deficits in the Operating Fund of $7.1 million in 2016 and $6.9 million for 2017. These deficits represent 34% and 31% of the total budget, respectively, for those fiscal years. Operating at a deficit reduces the resources available for the following fiscal year.
The Report covers the period from July 1, 2015, to May 31, 2018.
See the Audit Report M-19-40.
To see other published reports, visit our Audit Reports section.
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