The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Maunabo. 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 paid $200,410 without usefulness for a feasibility study, design and engineering, and the leasing of a property for the construction of an urban market, movie theater, bowling alley, and a skating rink, among other projects, which were estimated at $2,146,000. From the initial estimate of $715,339 in 2013, the Municipality did not have the resources, but continued its development based on the expectation that the central government would allocate the funds to it. This situation is attributed to the fact that the mayor did not plan adequately before investing resources, nor did the Municipality have the economic resources. The development sites of these projects are deteriorated and in disuse (see photos in exhibits 1 and 2 of the Report).
The eight-finding audit notes that the Municipality disbursed $672,730 to a corporation for the purchase, installation, and maintenance of air conditioning units without requiring the certificate of work performed as provided by the College of Refrigeration and Air Conditioning Technicians of Puerto Rico. In addition, the Municipality made the improper payment of $8,422 to a contractor for the services of an excavator operator that it did not provide to clear roads after the passage of Hurricane María. This work was performed by municipal personnel.
The Comptroller's auditors identified that the Municipality does not have its purchasing functions centralized, and had not established regulation for contracting mechanical services and repair of municipal equipment. In addition, for the purchases of the Diagnostic and Treatment Center from 2017 to 2019, they did not request three quotations from at least three representative market suppliers. This situation does not allow for adequate control of purchases, which fosters the commission of errors.
The internal auditor position of Maunabo was vacant from 2017 to 2019, and the Internal Audit Unit was inoperative from 2017 to 2018. The mayor appointed an employee to internal auditor functions, but she did not meet the requirements by law to occupy the position.
Contrary to the Regulation for Municipal Administration of 2016, the annual physical inventories of property were not conducted from 2018 to 2019. This situation does not allow for maintaining adequate control of municipal property and may foster improper use or loss.
The Municipality registered and submitted contracts to the Office of the Comptroller up to 11 months after their date of execution. This situation does not allow these contracts to be available as public documents to the citizenry. From 2015 to 2019, Maunabo executed 785 contracts and 359 amendments totaling $31,942,348.
The Report comments that the Municipality's fiscal operations have accumulated deficits of $1,278,669 for 2016, $2,376,358 for 2017, and $1,017,357 for 2018. In the fiscal year 2019 budget, the Municipality only appropriated $40,000 to reduce the deficit. Operating with a deficit reduces the resources available for the following year because the amount of it must be appropriated on a preferential basis in the next budget.
The audit recommends that the Office of Management and Budget ensure that the Municipality complies with the Corrective Action Plan established by the Office of the Comptroller of Puerto Rico.
The Report of Maunabo covers the period from July 1, 2015 to June 30, 2019.
See the Audit Report M-21-23.
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