The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Gurabo. A qualified opinion is issued when the noncompliances individually or in the aggregate are significant, but not pervasive.
The Report reveals, regarding the management of the petty cash fund, that 55 transactions for $5,343 were not recorded in the Disbursement Control report. In addition, payment receipts and cash surpluses were detected, which were delivered to the fund custodian up to a year after the purchase. These situations cause a lack of control in disbursements, and in the administration and replenishment of the petty cash fund.
The five-finding audit points out that the Municipality does not maintain a perpetual inventory nor conduct periodic verifications of the manual receipts of collections. In addition, when the official collector changed on January 16, 2017, no inventory was conducted of the official receipt booklets, cash on hand and other values. This situation, contrary to current regulations, is attributed to the lack of supervision of the Finance director.
Contrary to the Regulation for Municipal Administration of 2016, the secretary of the Auction Board did not provide the minutes of the meetings of 25 auctions, and the 34 minutes provided were not signed by the chair of the Board. These deficiencies detract from the authenticity of the decisions made by the Board and do not allow maintaining complete and reliable records.
The Report discloses that the Municipality did not investigate the theft of 10 property units for $16,643, did not notify the loss of property in 11 thefts to the Office of the Comptroller of Puerto Rico (OCPR) and did not provide for examination the file of a theft incident. This situation prevented the Municipality from establishing responsibilities and prevented the OCPR auditors from examining the incident.
In addition, the person in charge of municipal property did not conduct the annual physical inventory for fiscal years 2016-17 and 2017-18, and as of June 30, 2019, the mayor had not submitted to the OCPR the Annual Certification of Notification of Losses and Irregularities in the Management of Public Funds or Property for 2017 and 2018. These deficiencies foster the loss of property and prevent maintaining adequate control.
The Office of the Comptroller's auditors identified 11 special funds with economic resources of $4,471,884 that had remained inactive for up to more than five years. The municipal officials could not explain the reasons for the inactivity nor the efforts made to reprogram the funds. A similar situation had been commented on in the Audit Report M-18-19 of February 27, 2018.
The Report comments that the Municipality of Gurabo improperly used funds from the licenses paid in advance for 2018 and 2019, for operational expenses for 2017 and 2018. The credits authorized for a specific fiscal year must be applied exclusively to the payment of expenses incurred that year.
The Municipality had accumulated deficits in the Operational Fund from 2017 to 2019 of $6,101,413, $6,321,618 and $2,312,961 respectively. In addition, the Monthly Report of Income and Disbursements of May 30, 2019, reflected overdrafts of $6,475,349 in two operational funds. A similar situation had been commented on in the Audit Report M-18-19 of 2018.
As of June 30, 2019, Gurabo had 10 civil lawsuits for $1,605,967, pending resolution in the courts. In addition, the Municipality did not address collection recommendations of $45,350, for improper payments to two contractors.
This first Gurabo report covers the period from January 1, 2017 to June 30, 2019.
See Audit Report M-20-03.
To see other published reports, visit our Audit Reports section.
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