The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Río Grande. A qualified opinion is issued when the noncompliances, individually or together, are significant but not pervasive.
The Report reveals that 55% of the credit transfers for $4,224,299 were made without the surplus certifications required to support them. From 2018 to 2019, the mayor and the legislature authorized 102 transfers for $1,173,527, without the Finance directors detailing, in the surplus certification, the budget appropriations, the obligations, and the disbursements made against each of the affected items.
These situations do not allow adequate control of the balances in the funds and in the budget items, which can cause deficits and overdrafts.
The seven-finding audit notes that the Municipality did not obligate the necessary budget credits at the time 11 of the 13 contracts and seven of the 25 amendments formalized between 2015 and 2020 were granted. The obligation of funds was made up to nine months later. A similar situation had been commented on in Audit Report M-16-21 of March 28, 2016.
Contrary to the law and regulations in force, the Municipality registered the disbursements of 173 checks for $1,769,746 issued manually, up to two years late, in the Integrated Solution for Advanced Municipalities (SIMA) system. In addition, the monthly income and disbursement reports generated by SIMA and the program of a consultant reflected accumulated differences of $21,292,874 in income and $17,102,727 in disbursements. This situation is attributed to the fact that the deputy director of Finance prepared and made the corresponding adjustments in the consultant's program, but not in the SIMA system, and manual payments were issued that were also not registered in SIMA.
The auditors detected that the Municipality had borrowed $3,138,243 from the bank account of Joint Resolutions (legislative funds). As of the date of the audit, they had not returned 39% of those funds. In addition, as of June 3, 2021, the director of Finance could not provide evidence of the surplus reports of the Joint Resolutions account that must be prepared and submitted to the Legislative Assembly.
The Report published that the mayor did not submit the appointment of the private citizen of the Bidding Board for the approval of the Municipal Legislature. This person participated in 29 meetings without being confirmed. This deficiency may cause the legality of the Board's decisions to be questioned.
The examination of property operations reflected deficiencies due to the lack of control over property. For example, since 2016, the Municipality does not maintain an updated central registry of all property, nor files of real property, and the custodian who ceased functions in 2017 did not carry out the corresponding inventory. In addition, 141 units of property were disposed of without the certifications of unserviceable property.
The audit comments that the Monthly Report generated by the consultant's program reflected overdrafts of $3,313,076 in 18 municipal funds as of June 30, 2019. The overdrafts affect the credit with the providers and create a precarious fiscal situation for the Municipality.
The lack of protection of the computerized information systems caused the permanent loss of information stored on the servers and in the backups without the possibility of recovering it. The information systems suffered damages caused by interruptions in the voltage and a ransomware cyberattack in 2019.
The Administration for the Comprehensive Care and Development of Childhood (ACUDEN) of the Department of the Family questioned, in Investigation Report CC-16-05-01, the salary of $13,827 to the director of the Center because she did not have the required academic preparation of a university bachelor's degree, and $1,830 for noncompliance with certain payments to providers.
This first report on Río Grande covers the period from July 1, 2015, to December 31, 2019.
See Audit Report M-22-39.
To see other published reports, visit our section of Audit Reports.
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