Press Releases

The Comptroller of Puerto Rico issued an adverse opinion on the fiscal operations of the Municipality of Santa Isabel. The tests performed and the evidence show that the operations regarding the granting of a salary differential, the appointment of two executives, and the reimbursement of travel expenses, among others, were not carried out, in all significant aspects, in accordance with the applicable law and regulations.

The Report reveals that the former mayor designated on an interim basis and granted a differential as Finance director to an employee of the Finance Office who held a Bachelor of Arts with a concentration in History. It is recommended that the Secretary of Justice consider this situation in order to take the pertinent measures.

In addition, the former mayor designated as special aide in charge of the Human Resources Office a transitory clerk with training in nursing and without a bachelor's degree in the specialty required to hold the position. These situations, contrary to law and to the Classification and Compensation Plan for Confidential Service Employees of 2010, could cause the decisions and actions of these employees to be challenged, to the detriment of the Municipality.

The four-finding audit notes that $5,050 was illegally paid to an engineering and design company for an amendment to the original contract that was never carried out or formalized. The payment was made through a purchase order and a disbursement voucher. The then-Finance director, following a finding by the auditors of the Office of the Comptroller, requested the engineering company, whose owner was her brother, to return said payment. In fact, the contract in question was signed by the father of the Finance director in the capacity of Director of Operations. This person, who is also an engineer, maintains contracts with the Municipality through other companies he owns. This situation was referred to the Office of Government Ethics on December 12, 2018.

The Municipality did not provide for examination by the auditors of the Office of the Comptroller the five disbursement vouchers for $25,250 issued in favor of said company. This situation, contrary to the law in force, made it impossible to verify in all its details the services rendered by the contractor, as well as the correctness of the disbursements made.

The Report reveals that, as of March 31, 2019, the Municipality owed a total of $2,551,087 to the Aqueduct and Sewer Authority, to the Electric Power Authority, to the Department of Labor and Human Resources, and to the Department of Treasury. This debt, which includes interest and penalty charges, aggravated the fiscal situation of the Municipality and affected the resources that the referenced governmental entities should receive. A similar situation had been commented on in the Audit Report M-16-20 of 2016.

One of the findings indicates that the Municipality paid reimbursements of $6,620 to a construction projects manager, whose contracts did not include a clause on the purchase of materials with his personal money and the reimbursement of said expenses. This situation reveals that the Finance director did not adequately supervise said operations.

The Report comments on the multiple obstacles to obtaining the evidence necessary to carry out the audit. In 2016 the mayor gave instructions not to deliver information or documents or to allow interviews of officials, but only through the liaison officer. He then notified the Comptroller's auditors of the indefinite suspension of the audit until he could speak with the Comptroller about the Audit Report M-17-11 of 2016. The secretary of the president of the Municipal Legislature notified the auditors of the Office of the Comptroller that she had received instructions not to deliver documents or information. The Comptroller sent a letter to the mayor on November 23, 2016, warning him about the repercussions of continuing to obstruct the audit processes.

The efforts to visit the Public Works workshop and the Hotel Hacienda de Santa Isabel on five occasions were ignored. Sixty-eight requests for information, 14 follow-up letters, and three formal subpoenas were made from 2016 to 2019, and the officials responded with delays of up to 3 months.

The auditors were never able to evaluate the reliability of the data processed by the information systems related to the disbursement vouchers and payroll transactions, since the entity refused to provide the requested information.

These situations, contrary to the Constitution of the Commonwealth of Puerto Rico and to Act 9 of July 24, 1952, are classified as a felony in Act 37-2004, “To classify as a felony any person who obstructs, delays, or impedes an investigation or audit by the Office of the Comptroller”. In addition, the Report recommends that the Secretary of Justice take the measures he deems pertinent in this regard.

The Report also comments that the Municipality recorded accumulated deficits in the Operational Fund of $5,479,220 and $6,824,806 for fiscal years 2017 and 2018. In addition, as of May 31, 2018, it had not recovered $349,437 corresponding to the recommendations of six audit reports; M-09-09, M-09-64, M-09-67, M-13-16, M-16-20, and M-17-11.

The audit referred to the College of Engineers and Land Surveyors of Puerto Rico in 2019 a possible conflict of interest of an advisor-contractor of the Municipality whose son, also a contractor, performed functions of representative, director of operations, manager, designer, and inspector of the projects of his father's company.

As of February 5, 2019, the Municipality maintained 53 of the 61 municipal employees classified as transitory employees for up to 13 years in excess of the regulatory year. A similar situation had been commented on in the Audit Report M-16-20 of 2016.

This second and final report covers the period from July 1, 2014 to May 31, 2018.

See the Audit Report M-21-43.

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