The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Caguas. A qualified opinion is issued when the individual or aggregate noncompliances are significant, but not pervasive.
The Report reveals that the Municipality executed 12 contracts and two amendments for $371,155 for refrigeration services, with a regular corporation whose president had an expired refrigeration and air conditioning technician license. This situation, contrary to current law and regulation, could have affected the quality of the services received to the detriment of the citizenry.
In addition, the Comptroller's auditors found that eight technicians without the required license signed 41 service reports; six technicians contracted by the corporation with the expired license signed 42 service reports; and one technician with an apprentice license who provided services without the supervision of a licensed technician signed eight service reports. These internal control deficiencies are attributed to the fact that the director of the Municipal Secretariat and the secretaries did not require the technicians to provide evidence of their licenses and professional memberships.
In this regard, the Report recommends to the Secretary of Justice that he consider these situations in order to determine the administrative or judicial actions to follow. To the presidents of the Examining Board and of the Association of Refrigeration and Air Conditioning Technicians of Puerto Rico, it is recommended that they take the measures they deem pertinent as a result of these situations.
The two-finding audit also notes that, contrary to law, payments for $13,963 were authorized and disbursed without prior formalization and amendment of a written contract for repair and maintenance services of air conditioners and refrigeration equipment.
The Report comments that the Municipality had accumulated deficits in the Operational Fund of $3,495,790 for 2017 and $4,422,219 for 2018 as reflected by the audited financial statements. In the fiscal years from 2016 to 2018, current deficits of $8,109,302, $15,248,339 and $926,429 respectively were determined. The Municipality did not allocate funds to cover the current deficits of 2016 and 2017 on a preferential basis; consequently, the services it must provide to the citizenry are adversely affected.
As of June 30, 2018, Caguas had 157 employees appointed to transitory positions, some for as long as 18 years. Transitory appointments cannot exceed one year except for exceptions provided by law.
The Municipality had 51 civil lawsuits for $22,650,661 pending resolution in the courts as of December 31, 2018, most of them for damages. In addition, before the Public Service Appeals Commission and the Investigation, Prosecution and Appeals Commission, the Municipality had 33 cases to resolve for benefit claims and actions.
The Audit Report recommends to the Office of Management and Budget that it ensure that the Municipality complies with the Corrective Action Plan established by the Office of the Comptroller of Puerto Rico.
This first report on Caguas covers the period from July 1, 2015 to December 31, 2018.
See Audit Report M-21-30.
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