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The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Corozal. A qualified opinion is issued when the noncompliances, individually or together, are significant but not pervasive.

The Report reveals that the Municipality paid $140,547 for an electricity generator, a truck, tiles, and materials that have had no use. The generator for the use of the San Rafael Cine Teatro was never installed, and the hook truck bought at an auction in Orlando, Florida, was never used since it was acquired with mechanical defects and is in a state of abandonment. In addition, some steel joists and plates acquired to rebuild the roof of the Transportation area at municipal Public Works are out in the open and unused, 14 acrylic sheets that serve as a protective shield on the desks for COVID-19 are stored in a hallway, and the marble tiles for the mayor's office were not installed and some were broken (See photos in Annexes 1, 2, and 3 of the Report).

This situation of investing in resources that have had no use is attributed to the fact that the mayors, and the directors of Public Works in office, did not protect the interests of the Municipality.

The eight-finding audit notes that the Municipality specified makes and models in the requisition of four vehicles for $90,851 in September 2020 with funds from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This situation is contrary to the Code of Federal Regulations, which establishes that transactions must be carried out in a manner that provides full and open competition.

The auditors found multiple administrative deficiencies such as a payment of $3,600 to install air conditioners before receiving the service, a payment of $42,163 without the providers' invoices, or the payment of $1,261 for financing charges on the credit card assigned to the mayor. Similar situations had been noted in Report M-20-31 of May 27, 2020.

As of June 29, 2021, the Municipality of Corozal had not cashed checks for $20,523 that were up to more than nine years overdue for the ambulance services rendered by the Municipal Office for Emergency Management and Disaster Administration (OMMEAD). In addition, uncashed checks or invoices were identified without an explanation of the work performed. This lack of control fosters that irregularities are committed and the loss of resources.

The Report reveals that the Municipality maintained 11 bank accounts of special funds for $325,795 inactive for up to more than three years. In addition, the reconciliations of the 28 active bank accounts were carried out with delays of up to three years. These situations deprive the Municipality of economic resources that can be reprogrammed and prevent maintaining reliable financial information.

The Office of Internal Audit (OAI) had not worked on audits in the areas of materiality and risk for the period from 2017 to 2020. A similar situation had been commented on in Report M-20-31. The lack of monitoring and oversight by the OAI prevents continuous oversight and deprives of information for the municipal operations.

Contrary to the law and regulations in force, the Municipality did not comply with sending the annual certification on Act 273-2003, Act of Contractual Standards on Independence in the Audits of Governmental Entities to the Office of the Comptroller. In addition, the Municipality sent the Positions Report up to 43 days late and the annual certifications of Act 136-2003, on the status of all privatization, up to 734 days late.

The Municipality of Corozal lacked regulations for the processing of payments by electronic transfers, and rules regarding the use, control, and custody of the electronic toll stickers for the Auto Expreso service. In addition, for the audited period, it had not updated the Purchasing Regulations, or the Regulations for the Establishment and Operation of Ambulance Services.

The audit comments that four citizens won, in 2015, a lawsuit in the United States District Court for the District of Puerto Rico for violation of civil rights. As of December 31, 2020, the Municipality had not made the $25,000 payment ordered by the Court.

As a result of a monitoring, by the Office of the Ombudsman for the Elderly (OPPEA) of the Petra Marrero Center for the Elderly, the funds were ordered frozen due to deficiencies in the accounting records, the disbursements, and lack of controls. From 2012 to 2017, the Center had received $767,171 in federal funds. In addition, the OPPEA recommended that the Municipality recover $5,587 for deficiencies in the payment of licenses and the lack of reprogramming of funds. This situation caused the Municipality to pay with ordinary funds $326,583 to employees assigned to the geriatric center.

As of December 31, 2020, 11 lawsuits against the Municipality were pending resolution by the Courts for $953,000.

This first report on Corozal covers the period from July 1, 2017, to December 31, 2020.

See Audit Report M-22-36.

To see other published reports, visit our section of Audit Reports.