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The Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Arecibo. A qualified opinion is issued when the individual or combined noncompliances are significant, but not pervasive.

The Report reveals that two officials offered false information about their academic preparation before the Appointments and Human Resources Commission that evaluates appointments for the consideration of the Municipal Legislature. The official designated to the confidential position of director of Community Relations and Press indicated that he held an associate degree in communications from the University of the Sacred Heart; the evidence found reflected that he had only passed 6 university credits. Another official appointed to head the Tourism Office told the Commission that he held a bachelor's degree in administration with a concentration in accounting, and told our auditors that he had 32 university credits; the evidence found reflected that he had only completed his general high school studies. These situations were referred on July 23, 2020, to the then-interim Secretary of Justice so that she could take the pertinent administrative or judicial actions. In addition, it is recommended that the executive director of the Office of Government Ethics take the measures he deems appropriate.

The nine-finding audit also notes that the interim director of Public Revenues, the internal auditor, and the director of the Municipal Public Works Department appointed in 2015 by the then-mayor and approved by the Legislature did not meet the minimum requirements of preparation and/or experience for the position. In addition, an employee was recruited to fill the positions of municipal IVU coordinator and deputy director of Municipal Housing, nonexistent in the 1987 Classification Plan.

The Legislature and the then-mayor approved, from 2015 to 2018, nine confidential positions and two career positions whose ordinances lacked specific information about the position. A similar situation had been commented on in the Audit Report M-17-35 of May 3, 2017.

The Comptroller's auditors found that the principal and sole officer of a corporation hired from 2015 to 2018 to provide refrigeration services had had his license expired since 2008, and three of his employees who signed 46 service sheets did not hold a license. This situation was referred to the presidents of the College and the Examining Board of Refrigeration and Air Conditioning Technicians of Puerto Rico, and to the Secretary of Justice on December 13, 2019, so that they could take the actions they deem pertinent.

Contrary to the law and regulations in force, the Finance director did not obligate the budget credits necessary to pay 12 contracts for $759,805 until a year after granting them. A similar situation had been commented on in the Audit Report M-18-07 of 2017. In addition, these contracts were not submitted to the Office of the Comptroller within 15 days after their granting, but until eleven months later.

The audit reveals multiple deficiencies, such as the fact that no evidence was found of the disbursement vouchers having been prepared for 34 checks for $248,704, nor of their registration in the Monet Accounting System, vouchers without the signature of the former mayor or his authorized representative, the absence of invoices in the vouchers, and others. In addition, as of January 31, 2019, delays of up to two and a half years had been recorded in the preparation of the reconciliations of the Payroll and special accounts bank accounts. These situations foster the commission of irregularities with the Municipality's funds and make it difficult to detect them in time to assign responsibilities.

The Report mentions the lack of oversight by the Internal Audit Unit, since it did not carry out audits that included the areas of materiality and risk in the functioning of the accounting system, in the bids, in the permanent works, or in the professional services. In addition, the Audit, Ethics, and Internal Affairs Commission of the Legislature was inoperative and the last meeting was held in 2014. These situations prevent maintaining continuous and effective oversight of the Municipality's finances and operations.

In Arecibo, the inventories of movable property required for the audited period were not carried out. The last inventory corresponds to 2011. The Municipality also did not investigate the 25 accidents in which 22 vehicles were involved, nor did it report these situations to the Office of the Comptroller as required by the legislation in force.

In fact, the then-mayor did not submit, from 2016 to 2018, the Annual Certification of Notification of Losses and Irregularities in the Handling of Public Funds and Property, to the Office of the Comptroller as provided by Regulation 41. The Municipality also did not submit, from 2014 to 2018, the Annual Report on the Status of Privatizations, to the Office of the Comptroller as provided by Act 136-2003. The Municipality has contracts in force for the administration of the Landfill and the lease of the Rubén Otero Bosco parking lots and the North Terminal.

The audit reveals the absence of regulations and procedures in the operations of the Finca Capó, the Villa de la Central los Caños, the Caño Tiburones Guest House, and the Municipal Gymnasium. This situation prevents maintaining adequate control and can foster the improper use of public funds. These enterprises had generated $433,547 for the audited period.

The Report comments that 32 of the 38 transitory employees remain so classified despite up to five years in excess of the 12 months provided by law.

The Audit Report also recommends that the director of 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.

This first report on Arecibo covers the period from July 1, 2015 to December 31, 2018

See the Audit Report M-21-38.

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