The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Maunabo. A qualified opinion is issued when noncompliance, individually or as a whole, is significant but not pervasive.
The Report reveals that the Municipality did not hold a public bid for the construction of the gymnasium of the municipal coliseum. The cost of the work, at $142,065, exceeded the $100,000 limit established by federal regulation for using the funds of the Community Development Block Grant (CDBG). The Municipality also did not require the contractor to pay the construction excise tax that the law authorizes, nor did it deduct it from the payments made, for which reason it failed to receive $21,192 to address, for example, the operational expenses of Maunabo.
The audit notes that the Municipality does not have its purchasing functions centralized and that it paid for goods and services totaling $51,398 without obtaining the three quotes from at least three suppliers. Report M-14-28 of 2014 commented on a similar situation.
The Municipality did not comply with submitting to the Office of the Comptroller of Puerto Rico the Annual Certification of Loss Notification for the years 2014 and 2015, nor did it report the theft of a boat motor. In addition, in the Municipal Public Works Department, fuel was acquired without written authorization, files of the municipal vehicles were not maintained, nor perpetual inventories of the parts.
Contrary to Act 81-1991 on Autonomous Municipalities, the Municipality authorized the assignment of eight employees to provide services in four public schools and one nonprofit entity, without formalizing written agreements. In addition, it had not updated the Classification and Compensation Plan, nor did it have a committee to select career service personnel. These situations may foster irregularities and/or favoritism in the recruitment process.
Our auditors identified that the Internal Audit Unit had not carried out periodic audits that included the materiality and risk areas in collections, purchases, bids or payrolls. The lack of oversight by Internal Audit may foster the commission of errors and deprives management of information necessary about the functioning of the systems, controls and other municipal operations. A similar situation had already been commented on in Audit Report M-14-28.
The Municipality had not approved a regulation for the administration and use of the facilities of the Community Center of the Tumbao ward. Regarding this community center, in July 2015 the mayor and the then-president of the Municipal Legislature received a complaint alleging that a municipal legislator was renting that center and it is unknown what she did with the money received. Our examination revealed that the complainant's allegations are not recorded in the minutes, the facts were not investigated, the complaint was not referred to the Internal Audit Unit, nor was the Department of Justice, the Office of Government Ethics, or the Office of the Comptroller notified.
The audit also comments that the Municipality kept 43 temporary employees for periods longer than the regulatory year. Some of the employees have been classified as temporary for up to 24 years.
This second and final report on Maunabo covers the period from January 1, 2012 to June 30, 2015.
See Audit Report M-20-01.
To see other published reports, visit our Audit Reports section.
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