The Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Villalba. A qualified opinion is issued when noncompliance, individually or in the aggregate, is significant but not pervasive.
The Report reveals that the Municipality paid $146,235 in fines, interest, and penalties, for remitting late the withholdings and contributions to the Internal Revenue Service (IRS). This situation could prevent employees from being able to apply for the benefits to which they are entitled and worsens the Municipality's fiscal situation.
As of December 31, 2018, the Municipality owed $1,324,728 to the Aqueduct and Sewer Authority (AAA), to the Electric Power Authority, and dues to unions and associations. In addition, it had a payment plan with the AAA, for a debt of $1,018,015 through the withholding of the CRIM remittance. A similar situation had been noted in Audit Report M-16-27 of 2016.
The five-finding audit notes that in Villalba they paid $40,904 for the basic charge of internet service and telephone calls, for equipment verbally assigned by the mayor to officials not included in Ordinance 37 of 2007. In addition, they paid $26,262 in excess of what was contracted, for internet use and long-distance calls.
Contrary to current law, the Municipality invested $287,510 for the construction of the first phase of a municipal cemetery that is abandoned; the cemetery office had been vandalized and the place was covered in weeds. (see photos in Appendix 1 of the Report). This situation is attributed to the Municipality not identifying sufficient funds to carry out the second phase of the project nor to maintain in adequate conditions the work performed.
The Report discloses that from 2015 to 2017 the annual physical inventories of municipal property were not carried out. In addition, the Municipality did not maintain a perpetual inventory of the oils, medical supplies, cleaning and sports materials, and the two employees in charge of the four warehouses did not have a written designation appointment.
The Comptroller's auditors identified that the Municipality had not established a regulation for the administration and use of three credit cards assigned by the General Services Administration to purchase the fuel for the municipal vehicles and the heavy equipment. In addition, the Travel Expense Regulation of the Municipal Government of Villalba of 1994 had not been updated to the Regulation for Municipal Administration of 2016. These situations prevent maintaining adequate controls and lead to errors being committed in the use of the credit cards and the purchase of fuel.
The Report comments that, as of December 31, 2018, the Municipality had five lawsuits in the courts pending resolution for $777,836. In addition, as of April 26, 2019, it had paid three judgments for $119,627 and owed four judgments for $469,556, arising from seven lawsuits for breach of payment to contractors and a claim for the remittances of the Employees Association of the Commonwealth.
This first report on Villalba covers the period from July 1, 2014 to December 31, 2018.
See Audit Report M-21-45.
To see other published reports, visit our Audit Reports section.
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