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The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Aguadilla. 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 failed to receive $659,571 of the profits of the municipal enterprises for fiscal year 2013-14. The Finance director certified that the 2014 profits were used in operational expenses of the enterprises. However, Ordinance 80 of 2013 establishes that 75% of the profits of the Las Cascadas Water Park, the Aguadilla Ice Skating Arena, and the Aguadilla Bowling Alley must be deposited in the municipal coffers.

The five-finding audit notes that the Municipality contracted, for $2,574,335, the regular corporations A and B for the design and construction of the Water Park and the Luis T. Díaz Coliseum, whose officials were not licensed engineers. The legal advisor, the municipal secretary, and the principal administrator deviated from their duties by not requesting the professional licenses for the provision of the contracted services. This situation was referred to the presidents of the College and Examining Board of Engineers and Surveyors of Puerto Rico on April 29, 2019 so that they take the pertinent actions.

In addition, the official of corporation B certified, by means of a form in 2016, that he had a valid license and college membership. This situation of false representation was referred to the Interim Secretary of Justice, and to the presidents of the Examining Board and of the College of Refrigeration and Air Conditioning Technicians of Puerto Rico on April 29, 2019 so that they take the actions they determine appropriate.

The Report also comments that the Municipality contracted regular corporations instead of professional service corporations. In addition, the professionals of the corporations contracted by corporations A and B infringed the canons of ethics, and the ethical principle and rule of their professions since they associated with other corporations even though they were not legally authorized to provide engineering services in accordance with the legal order in force. These situations were referred to the presidents of the College and the Examining Board of Engineers and Surveyors of Puerto Rico; to the presidents of the College and the Examining Board of Architects and Landscape Architects of Puerto Rico, on April 29, 2019.

The Comptroller's auditors found that the then-Finance director in 2015 gave instructions to an accountant III to create a budgetary item for $200,000 from a request for funds to the Legislature of Puerto Rico. Said funds were not approved, for which reason payments were issued to corporation B, with loans from Special Funds. This situation of recording and obligating credits without proof of having the funds approved by the Legislative Assembly may affect the books and records of the Municipality's accounting and financial activity.

The Report identifies deficiencies with the issuance of disbursement vouchers and with the bank reconciliations. The examination revealed differences between the balances of the bank reconciliations and the Monthly Report. This situation prevents maintaining adequate control of the Municipality's finances.

The Municipality had to disburse $761,619, without receiving any service in exchange, as payment for a lawsuit it lost for discrimination and retaliation against a municipal employee in 2015. In addition, as of August 10, 2017 it had four civil lawsuits pending resolution in the courts for $620,000.

The Municipality's Internal Audit Unit detected irregularities regarding the function of collection and disposal of solid waste in 2013. To that effect, the then-mayor removed the then-director of Sanitation and dismissed him from the career position.

The Report covers the period from July 1, 2013 to June 30, 2017.

See the Audit Report M-21-19

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