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The Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Sabana Grande. A qualified opinion is issued when noncompliances, individually or in the aggregate, are significant but not pervasive.

The Report reveals that the Municipality paid $23,634 in interest and penalties for delays in the payments of obligations with the Department of Labor and Human Resources. The debt with the Department of Labor, added to the debt with the Aqueduct and Sewer Authority, and with the General Services Administration, amounted to $800 thousand for the audited period. This situation is attributed to the fact that the Finance directors did not manage effectively and caused the resources that the governmental entities should receive to be affected.

The audit of eight findings notes from a sample that for 78% of the contracts, the budgetary appropriations were not obligated at the time they were granted, but rather up to seven weeks later. From 2014 to 2016, 3,138 contracts for $23 million were granted in Sabana Grande. A similar situation had been commented on in Audit Report M-16-26 of 2016.

The Comptroller's auditors identified deficiencies with the bank reconciliations. The accounts reflected differences in the Current and Payroll accounts of $106 to $437,784, since the accounting adjustments had not been made in the books and fiscal reports. In addition, the Municipality kept $72,332 in bank accounts of special funds that had remained inactive for almost three years.

Contrary to the laws and regulations in force, in Sabana Grande $15,527 were paid for the use of the credit card, without the mayor presenting the invoices, the list of participating persons, or the certifications on the nature and necessity of the expenses. This situation could have allowed the improper use of funds for purposes outside public management.

The Report unveils that four employees in storekeeper functions did not have the appointment for it. In some of the 11 municipal warehouses, neither annual physical inventories nor perpetual inventories were carried out. The Municipality notified the Office of the Comptroller, with delays of up to 3 and a half years, of the incidents of property loss, theft, mutilation, and vandalism.

One of the findings revealed the lack of regulation in the holding of a contest in which cash prizes would be awarded. The contest was part of several activities that would be carried out for the revitalization of the urban center with a contribution of $50,000 from the Puerto Rico Trade and Export Company.
In addition, the auditors detected that the official collector performed conflicting functions by carrying out the collections and at the same time keeping the Registry of Licenses. This situation allows the commission of errors and irregularities with the Municipality's funds.

The Report comments on the accumulated deficits in the Operational Fund that amount to $2.9 million in 2015, $4.2 million for 2016, and $5.1 million for 2017. In the 2017 and 2018 budgets the Municipality did not allocate funds to reduce the deficits. In addition, Sabana Grande incurred overdrafts of $1.6 million in the municipal funds.

On July 2, 2018 the federal prosecutor's office filed charges against the then mayor for fraud against the government of the United States. The charges are related to the granting of contracts with funds of the Department of Education for $2.9 million. In addition, in 2013 the Office of Government Ethics imposed a fine of $4,750 on the then mayor for violating the conditions of the waivers granted for the hiring of a relative.

The Municipality has two civil lawsuits for $130,000 pending resolution by the courts. As of June 30, 2017, the Municipality had not recovered $178,907 recommended in Audit Report M-16-26 of 2016.

The Sabana Grande report covers the period from July 1, 2014 to June 30, 2017

See Audit Report M-20-15.

To view other published reports, visit our Audit Reports section.