The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Guayama. A qualified opinion is issued when noncompliance, individually or as a whole, is significant but not pervasive.
The Report reveals that, from 2014 to 2016, the municipality did not perform the annual physical inventory of the property. In addition, the property custodian was not aware of the property acquired by the Municipality, nor did the directors of the units notify her of the receipt of property in their work areas. These deficiencies may foster the loss of property and do not allow maintaining adequate control.
The two-finding audit notes that Guayama had $5.7 million in special funds with economic resources that had remained inactive for up to more than 10 years. This situation, which had been commented on in Audit Report M-16-31 of 2016, indicates that the Finance director did not ensure the reprogramming of the economic resources as provided by current regulation.
The Report comments that, for fiscal year 2017, Guayama had an accumulated deficit of $9 million in the Operational Fund and overdrafts of $16 million. The overdrafts create a precarious fiscal situation for the Municipality and operating with a deficit adversely affects the services that must be provided to the public.
The audit mentions that a municipal employee was charged with appropriating $1,845 in cash from the collections of the Municipal Gymnasium. The Municipality's internal auditor investigated and confirmed the clerk's theft. The accused pleaded guilty and restituted the money. However, the Municipality never reported the theft to the Office of the Comptroller of Puerto Rico as required by current law and regulation.
The Report also comments that the audited financial statements for fiscal years 2015 and 2016 on the governmental operations of Guayama were issued without an opinion since the accounting firm did not have all the financial and budgetary information of the Municipality.
The Report covers the period from July 1, 2014 to June 30, 2017.
See Audit Report M-19-42.
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