The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Guánica. A qualified opinion is issued when noncompliances, individually or together, are significant but not pervasive.
The Report reveals that from 2018 to 2019 the Municipality issued duplicate payments of $75,284 to three contractors for the collection of debris generated by hurricanes Irma and María. In addition, the disbursement vouchers included 20 invoices for services previously paid. The finding also reveals that the Municipality paid $12,001 to a contractor in excess of what was invoiced and $1,249 to another contractor for services not contracted. These situations are attributed to the fact that the pre-intervention officer and the directors of Finance and Budget in office departed from their duties and did not protect the interests of the Municipality.
The five-finding audit notes that the Municipality did not prepare the informative returns corresponding to the $376,665 disbursed to four contractors in 2017. In addition, the Informative Return of one contractor did not reflect the $20,835 withheld and indicated an overpayment figure of $64,840 over the amount disbursed. In fact, the Municipality did not present evidence of having remitted the withheld amount to the Department of the Treasury. This situation fosters tax evasion and exposed the contractor to the payment of taxes that did not correspond to it.
The auditors detected multiple deficiencies with the bank reconciliations and the monthly reports. For example, the Municipality did not perform individual reconciliations of the two bank accounts it had at commercial banks, did not prepare 234 bank reconciliations of the 26 active accounts at the Financial Advisory and Fiscal Agency Authority, and a difference of $727,395 was reflected between the reconciliations and the balances in the Health Center accounts. In addition, from July 2016 to June 2019, the Municipality had not prepared the Monthly Report of Income and Disbursements. These situations foster the commission of errors and irregularities and prevent maintaining reliable information.
Contrary to current law and regulations, the Municipality had not voided 11,912 blank checks from 16 active bank accounts and 37 closed bank accounts. In addition, from 2016 to 2018, the Municipality issued through the mechanized system 515 checks with the same numbering as the unvoided blank checks.
The Report indicates that from 2015 to 2019, 93 credit transfers between budgetary items for $1,250,302 were authorized without the required surplus certifications. A similar situation had been published in Audit Report M-17-01 of August 2, 2016.
As of November 25, 2019, six civil lawsuits against the Municipality for $27,998,156 were pending resolution in the courts. The audit also comments on 12 cases filed by employees before the Public Service Appeals Commission for claims of withholding, transfers and reduction of work hours, among others.
This second and final report of Guánica covers the period from July 1, 2015 to August 31, 2019.
See Audit Report M-22-22.
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