The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Toa Alta. A qualified opinion is issued when the individual or aggregate noncompliances are significant, but not pervasive.
The Report reveals that the Municipality executed two agreements for $77,800 with the corporation Empresas Municipales Toalteña (Company), without obtaining quotations from at least three representative suppliers in the market. In addition, it did not require the Company to obtain three quotations for the performance of works and improvements of the municipal facilities.
The Empresas Municipales Toalteña were created by Ordinance 23 in 2013 within the operational structure of the Municipality. In Ordinance 62 of 2014, it was authorized to grant it an initial capital of $110,000 for its operations.
The three-finding audit notes that the Municipality did not commit the budget appropriations to pay one of the agreements until 38 days after it was formalized, and did not obtain the bonds and policies required for the remodeling works of the City Hall and the Diagnosis and Treatment Center.
Contrary to current law, regulation and jurisprudence, the Municipality did not submit to the Office of the Comptroller the 2014 agreement, a 2016 settlement agreement nor a 2017 agreement for the assignment of two trucks. Failing to register the municipal contracts with the Office of the Comptroller prevents the documents from being accessible to the citizenry.
This second Report on Toa Alta reveals that a feasibility and marketing study was not performed to evaluate the investment in the Company nor for the six municipal companies created in 2017. As of August 14, 2018, the Municipality had not recovered $99,097 of the initial capital granted to the Company nor $546,600 of the 75% of its earnings. The Finance director indicated that she was unaware of the reasons why no efforts had been made to recover the capital or to obtain the periodic reports of revenues and disbursements of the Company's operations.
From the examination performed, the Board of Directors of the municipal companies was never composed of five members, as provided by Act 81-1991 on Autonomous Municipalities, and only met on five occasions over a period of more than five years.
The Internal Audit Unit of the Municipality of Toa Alta had not carried out audits or monitoring of the municipal companies in the areas of purchasing and disbursements, internal controls and collections, among others. The lack of oversight may encourage errors, irregularities and deficiencies in the management of resources.
The Audit Report recommends to the director of the Office of Management and Budget that he ensure that the Municipality complies with the Corrective Action Plan established by the Office of the Comptroller of Puerto Rico.
This second report on Toa Alta covers the period from January 1, 2014 to December 31, 2018.
See Audit Report M-21-32.
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