The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Sabana Grande. A qualified opinion is issued when individual or combined noncompliance is significant, but not pervasive.
The Report reveals deficiencies in the delivery of the daily reconciliation reports of the collections. From a sample examined, two assistant collectors on 17 occasions delivered collections of $1,258,233 to the official collector with delays of up to 16 days. This situation allows errors and irregularities with the Municipality's funds to be committed.
The two-finding audit points out that, as of December 31, 2019, the Monthly Report of Revenues and Disbursements reflected 182 special funds with $2,405,503 that had remained inactive for up to six years. In addition, as of July 31, 2020, Sabana Grande maintained six bank accounts with $119,712 in special funds that had remained inactive for more than five years. These situations constitute an inadequate administrative policy, make accounting difficult and limit the use of these resources for the benefit of the Municipality.
The Report comments that Sabana Grande has accumulated deficits of $5,000,337 and $4,395,325 in the 2018 and 2019 budgets respectively. These amounts constitute almost 50% of the accumulated deficit of the total budget. In 2017, the Municipality only allocated $126,229 to reduce a deficit of $892,072, that is, 14%. In addition, the Monthly Report as of December 31, 2019 recorded overdrafts amounting to $1,493,457 in 32 municipal funds. Similar situations had also been commented on in Audit Report M-20-15 of January 13, 2020.
The Municipality has an agreement with the United States Department of Justice to return $500,000 after it was revealed in an investigation that, together with a private company and members of the Puerto Rico Olympic Committee, they issued false statements, false records and false representations to the Puerto Rico Department of Education. Through this scheme they obtained federal funds of $1,770,200. As of December 15, 2020, the Municipality was complying with the agreement.
Sabana Grande has a civil lawsuit pending in the courts against the Municipality for $45,000 for damages. In addition, as of December 10, 2020, it had not recovered $178,907 as recommended in Audit Report M-16-26 of 2016.
The Sabana Grande report covers the period from July 1, 2017 to December 31, 2019.
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See Audit Report M-22-10.
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