The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Maricao. A qualified opinion is issued when the noncompliances, individually or in the aggregate, are significant but not pervasive.
The Report reveals that the Municipality of Maricao transferred $498,437 from the bank account of funds awarded by the Federal Emergency Management Agency – FEMA Hurricane María, to the bank accounts of permanent works and improvements, and operating expenses on May 31, 2018.
As of July 8, 2022, the Municipality had not returned the funds to the FEMA Hurricane María funds bank account. The improper use of federal funds may cause the seizure of municipal funds, a situation that would aggravate the services they must provide to the public.
The six-finding audit notes that the last physical inventory of the property carried out corresponds to 2018. However, the Municipality does not maintain evidence of the certified inventory of 2018, so it is not on record that it was carried out.
In addition, contrary to Regulation 41, as of January 20, 2021, the then mayor had not submitted to the Office of the Comptroller the Annual Certification of Notification of Losses or Irregularities in the Handling of Public Funds or Property for 2019 and 2020. Regulation 41 provides that this certification of compliance must be submitted under oath, no later than August 31 of each year.
The Municipality of Maricao does not have a public documents administrator since 2017 and, as of April 21, 2021, it continued vacant. The documents administrator is the person responsible by law for complying with the standards of the Public Documents Administration Program of Puerto Rico, attached to the Institute of Puerto Rican Culture (ICP). In fact, the ICP reported that Maricao has not had an administrator since 2005 and that since 1987 it has not complied with preparing the Public Documents Disposition List.
A visit on September 21, 2021 to the inactive archives stored in two railcars revealed the state of abandonment of public fiscal and administrative documents. Historical documents from the town's founding dating back to April 1, 1874 were even found. The ICP officials, who accompanied the visit, took possession of the historical documents to be taken to the Historical Archive of Puerto Rico. (See photos in Exhibit 1 in the Report).
On another visit on April 30, 2021, the Comptroller's auditors found public documents in the former municipal facilities at the Recreation Center, which were destroyed and unusable. The abandoned building had no electrical power and rain and pigeons entered through the holes. (See photos in Exhibit 2 in the Report).
Contrary to the law and regulations in force, the Municipality did not submit to the Office of the Comptroller of Puerto Rico the Certification of Compliance with Act 273-2003, Contractual Standards on Independence in the Audits of Governmental Entities, from 2017 to 2019. In addition, the Municipality's officials sent up to seven months later 86% of the monthly reports of the Position Registry, from 2018 to 2021. This circumstance deprives the Government, the Office of the Comptroller, and the public of information and fosters the lack of transparency.
The audit reveals that the Municipality approved an ordinance contrary to the law to assign heavy equipment free of charge to the residents of Maricao. From July to December 2021, the Municipality assigned heavy equipment free of charge on 105 occasions to 84 residents. Because of this, the Municipality forwent revenues needed for its operations.
The Municipality awarded the contract to perform the audit of the 2020 financial statements 363 days after the established date, and received the financial statements one year after the date established by federal regulations. This situation, among others, may affect the allocations of federal funds to the Municipality.
The Report comments that Maricao had accumulated deficits in the Operational Fund of 63% of its budget in 2017, 43% in 2018, and 81% in 2019. In addition, in fiscal year 2019, it did not allot the credits necessary to cover the $756,834 deficit from 2017.
The audit recommends to the Office of Management and Budget that it observe that the Municipality complies with the Corrective Action Plan established by the Office of the Comptroller.
This first report on Maricao covers the period from November 1, 2017 to December 31, 2020.
Audit Report M-23-17 can be obtained on our website: www.ocpr.gov.pr.
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