The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Las Piedras. A qualified opinion is issued when noncompliances, individually or together, are significant but not pervasive.
The Report reveals that the municipal officials did not provide for examination the collection receipts corresponding to several periods between 2015 and 2018 for $48,531. This situation, contrary to Act 81-1999 on Autonomous Municipalities, prevents maintaining complete and reliable information on the financial situation and the result of the Municipality's operations.
The four-finding audit notes that a special assistant to the mayor implemented in 2018 a petty cash fund of $100 for the Use of the Collections Area, without requesting the approval of the Municipal Legislature. The Finance Unit also had a Petty Cash fund of $2,000, which did have the approval of the Municipal Legislature since 2013. In neither of the two petty cash funds did the Municipality conduct periodic control interventions nor adequately supervise those operations.
Contrary to the laws and regulations in force, the Municipality did not conduct periodic dispositions of documents; the last one was done in 2013. In addition, the two facilities for filing public documents did not have a fire alarm system, automatic sprinklers, or smoke detectors.
The Report publishes that, as of November 30, 2018, the Income and Disbursements Report reflected five funds with economic resources of $20,360 that had remained inactive for more than three years. A similar situation had been commented on in Audit Report M-17-33 of 2017.
The audit comments on the lack of information in the invoices submitted by an administrative consulting advisor of the Municipality whose service coincided for 52 days with services rendered to the House of Representatives of Puerto Rico between 2017 and 2018. This situation prevented verifying whether the services were offered at conflicting hours and is due in part to the fact that Act 237-2004 on government professional services contracts does not require contractors with more than one contract with the government to indicate the hours during which they rendered the services. The audit recommends to the presidents of the Senate and the House of Representatives that they address this situation.
The Municipality had accumulated deficits in the Operational Fund of 13% of its budget for 2016, 20% for 2017, and 29% for 2018. In addition, in the budgets of fiscal years 2019 and 2020, it did not allocate the credits necessary to liquidate the current deficits of previous years.
In December 2014 and January 2015, the Municipality implemented measures to address the financial crisis such as the reduction of the workday and monthly salary for employees. In addition, it implemented a 5% reduction in the salary of the mayor and the trust officials.
As of January 31, 2019, Las Piedras had two civil lawsuits for $3,200,000 pending resolution by the courts.
The Report recommends to the director of the Office of Management and Budget to ensure that the Municipality complies with the Corrective Action Plan established by the Office of the Comptroller of Puerto Rico.
The Las Piedras report covers the period from July 1, 2015 to January 31, 2019.
See Audit Report M-21-13.
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