The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Peñuelas. A qualified opinion is issued when the noncompliances, individually or together, are significant but not pervasive.
The Report reveals that the mayor and the Legislature approved three executive orders and five resolutions, to authorize 211 credit transfers for $6,055,298, without having the required surplus certifications. Of these, some nine resolutions for $159,979 had the effect of reducing statutory items. This situation could limit the ability to comply with the budget commitments and fosters the lack of control of the balances among items.
The four-finding audit notes that the coordinator of the Section 8 Housing Program did not carry out collection efforts or follow up with the participants so that they would comply with the payment agreements. Of the examined sample of 10 of the 158 participants, 50% had payment plan agreements for $21,933. This situation, contrary to the Housing Choice Voucher Program Guidebook and the Administrative Plan approved in 2012, fosters that the owed funds become uncollectible.
The Municipality, by resolution in 2017, adopted as public policy the payment to contractors by direct deposit. However, as of June 30, 2021, it did not have any regulations in this regard. From 2019 to 2021, the Municipality had made 7,432 payments for $9,564,680 by electronic transfer.
The auditors identified that, as of April 7, 2021, no written rules or procedures had been formulated for the conservation of the Municipality's documents. In addition, the public document archive had leaks in the walls of the first and second floor, and the certificate of the elevator and other related equipment had been expired since 2019. Similar situations had been commented on in Audit Report M-20-14 of November 8, 2019.
The audit comments that the certified public accountant did not issue an opinion (disclaimer of opinion) on the financial statements of 2019 and 2020 regarding the governmental operations. Not issuing an opinion means that the accountant lacks competent, sufficient, and relevant evidence to issue the opinion. This is explained because the Municipality did not maintain complete, updated, and reliable accounting records, and did not record the deferred resources and obligations related to pensions.
As of June 30, 2021, two civil lawsuits for $4,135,680 were pending resolution by the Court, and another lawsuit for the imposition of municipal license fees with no amount. In addition, the Municipality has not addressed the recovery recommendation for $27,573 indicated in Audit Report M-17-29 of 2017.
The report on Peñuelas covers the period from January 1, 2019, to June 30, 2021.
See Audit Report M-22-38.
To see other published reports, visit our section of Audit Reports.
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