The Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Guánica. A qualified opinion is issued when the individual or combined noncompliances are significant, but not pervasive.
The Report reveals that the Municipality accumulated deficits in the Operational Fund of up to 61% of its total budget for 2018. In addition, it did not appropriate the credits needed to cover the deficits of fiscal years 2016 and 2017, but instead left an approximate balance of 93% uncovered. Operating with a deficit reduces the available resources and affects services to citizens. Failing to appropriate the deficit in the next budget causes it to accumulate and worsens the Municipality's economic situation. A similar situation had been commented on in the Audit Report M-17-01 of August 2, 2016.
The six-finding audit notes that the Municipality overestimated by up to 33% the revenues of several budget items from 2016 to 2018. The then-mayor, the Municipal Legislature, and the Finance directors in office did not consider the revenues certified in the most recent Single Audit, as required by Law, to the detriment of the Municipality.
As of June 30, 2020, Guánica owed $1,197,339 to the Administration of the Retirement Systems of the Employees of the Government of Puerto Rico and the Judiciary, to the Aqueduct and Sewer Authority, to the Electric Power Authority, and to the General Services Administration. In addition, it maintains debts with active payment plans for $1,318,690 with three governmental entities. In this regard, the Municipality incurred the payment of interest, surcharges, and penalties for $64,624. A similar situation had been commented on in the Audit Report M-17-21 of 2017.
The Comptroller's auditors found that the Municipality paid $45,078 to two officials for salaries that exceeded the salary scale established in the Position Classification and Compensation Plan for the Confidential Service of the Municipal Government of 2002. In addition, seven change reports were not found in the municipal personnel files for examination. These situations do not allow for adequate personnel management, and the absence of legal documents, such as change reports, can be detrimental to the Municipality.
The Municipality did not comply with Act 103-2006, Fiscal Reform Act of the Government of the Commonwealth of Puerto Rico nor with Regulation 53, Registry of Positions and Related Information, since it did not submit 19 Monthly Payroll and Position Reports to the Office of the Comptroller of Puerto Rico from 2017 to 2018. This situation, among others, deprives citizens and governmental entities of up-to-date information on payroll expenses and occupied and vacant positions in the Municipality.
The Report states that from 2016 to 2018, the annual physical inventory of property was not carried out in all areas and offices of the Municipality. Transfers of municipal property were also not reported to the person in charge, so the Property Transfer and Property Receipt documents were not prepared. In addition, contrary to the Regulation for Municipal Administration of 2016, the Municipality processed the final payments of officials and employees without certifying that they did not owe any property to the Municipality.
The audit comments that, as of December 31, 2018, Guánica had not recovered $273,423 corresponding to the audit reports M-10-44 of 2010, M-10-51 of 2010, M-14-14 of 2013, M-17-01 of 2016, M-17-21 of 2017, M-17-36 of 2017, and M-18-42 of 2018.
This first report on Guánica covers the period from July 1, 2015 to August 31, 2019.
See the Audit Report M-21-44.
To see other published reports, visit our Audit Reports section.
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