The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Lajas. A qualified opinion is issued when noncompliances, individually or together, are significant but not pervasive.
The Report reveals that, as of December 31, 2020, the Municipality owed $184,889 to the Aqueduct and Sewer Authority, the General Services Administration, and the Electric Power Authority. In addition, it paid $5,031 to the Federal Internal Revenue Service (Internal Revenue Service – IRS) in fines and interest for remitting the withholdings and contributions late.
The Internal Revenue Service regulations establish that payments to Federal Social Security are deposited every month in banks affiliated with the Federal Reserve. Similar situations had been published in audit reports M-19-39 of May 24, 2019 and M-14-40 of April 15, 2014.
The two-finding audit notes that the Municipality granted the use of a kiosk free of charge to a for-profit entity without the approval of the Municipal Legislature. The agreement formalized in 2018 and renewed in 2020 was also not submitted for the approval of the Legislature and indicated, erroneously, that the entity was nonprofit. To that effect the Municipality failed to receive $4,800 in rent for the kiosk.
The Report comments that the Municipality had to pay $25,000 for noncompliance with federal regulations by requesting only one proposal for a professional services contract with an engineering firm funded with federal funds from the Energy Efficiency and Conservation Block Grant. In addition, as of June 15, 2021 the Municipality had not recovered $146,117 indicated in audit reports of 2014 and 2016.
As of February 25, 2021, seven civil lawsuits against the Municipality for $7,738,593 were pending resolution in the courts. In addition, two cases filed by employees before the Public Service Appeals Commission were pending resolution. This second and final report of Lajas covers the period from July 1, 2017 to December 31, 2020.
See Audit Report M-22-21.
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