The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Ceiba. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant but not pervasive.
The Report reveals that the Municipality spent more than $1 million on the construction of four courts at the Sports Complex and on a kiosks and observation tower project called Guarida de Merlín, without utility and in a state of abandonment (see photos in Annex 1 and 2 of the Report). In addition, the Municipality formalized a contract to develop a commercial marina with the Local Redevelopment Authority of Roosevelt Roads. However, for the audited period, they had invested $171,804 and had only generated $46,153. The Municipality also ceded, free of cost and without a contract, the use of the recreational marina to a corporation to give sailboat navigation classes. All these situations are attributed, among others, to the fact that the mayor did not protect the interests of the Municipality and did not plan the viability of the projects.
The audit of eight findings points out that the municipality incurred extravagant expenses, by acquiring a Chevrolet Suburban LT1500 SUV for $60,000 for the mayor's official use whose leather seats have a heating system, in addition to 22” chrome aluminum rims. Contrary to applicable law and regulations, the Municipality included the specific make and model name in the SUV requisition. For the installation of the lights, siren and loudspeaker system for $2,276, quotes from at least three suppliers were not obtained. These situations foster favoritism in the award, adversely affect the finances and aggravate the economic situation of the Municipality.
The Comptroller's auditors identified that Ceiba owes $1.8 million to the Retirement Systems Administration and the Treasury Department. In addition, they found multiple deficiencies with the preparation of bank reconciliations and the check register. For example, checks were found without the name or signature of the person who collects it, bank reconciliations without the signature of the Finance directors or prepared incorrectly.
The Municipality contracted the creation of a 7-foot bronze sculpture of a track and field athlete without holding a public bidding, and did not record the budgetary appropriations for the payment of the contract until 39 days later. A similar situation had been commented on in Audit Report M-16-18.
The Report uncovers that the mayor, the Finance director and the internal auditor did not protect the interests of the Municipality by not reporting the disappearance or theft of license decals to the secretaries of Justice, Treasury and the Comptroller of Puerto Rico. In addition, no effective collection efforts were made for $1.8 million in accounts receivable, most of them more than five years overdue.
Ceiba lacks regulations for the control of the credit cards used for the acquisition of fuel, for which reason it is recommended that the mayor prepare a draft ordinance and present it to the Municipal Legislature.
The Report comments that Ceiba had accumulated deficits in the Operational Fund of $922,687 for 2015, $1.4 million for 2016 and $2.2 million for 2017. In addition, as of December 31, 2018, two civil lawsuits for $175,000 were pending resolution by the courts.
The Ceiba report covers the period from January 1, 2015 to December 31, 2018.
See Audit Report M-20-21.
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