The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of San Lorenzo. A qualified opinion is issued when the noncompliances, individually or in the aggregate, are significant but not pervasive.
The Report reveals that the Municipality overpaid $12,400 above what was billed for the lease of four electric generators in 2018. The Office of the Comptroller recommends recovering this amount from the contractor. In addition, the Municipality overpaid $5,240 for consulting services for recovery after Hurricanes Irma and María. As a result of our intervention, the Municipality issued a collection letter to the professional services corporation, which returned what it received in excess. Both situations are attributed to the fact that the pre-intervention officer approved amounts greater than those billed, and that the director of Finance did not adequately supervise the processes.
The three-finding audit notes, from a sample of five disbursements examined, that the Municipality paid $91,558 in fines, interest, and penalties to the Federal Internal Revenue Service (IRS) from 2018 to 2021. This situation affects the federal agency's resources to fulfill its functions and aggravates the Municipality's fiscal situation. A similar finding had been commented on in Audit Report M-16-30 of May 10, 2016.
The Report reveals that the former mayor did not submit to the consent of the Municipal Legislature a settlement offer for $125,902 before the Court of First Instance of Caguas, for a lawsuit for the collection of services and equipment rented during Hurricane María. Any settlement involving any type of financial disbursement greater than $25,000 must be submitted to the evaluation of the Municipal Legislature.
The audit comments that the Municipality of San Lorenzo paid $111,900 for three lawsuits for political discrimination and wrongful dismissal from 2019 to 2021. In addition, as of December 31, 2021, 13 civil lawsuits were pending resolution by the courts for $38,000,000, and two cases were pending resolution before the Public Service Appellate Commission for $75,000.
The audit recommends to the Office of Management and Budget that it ensure that the Municipality complies with the Corrective Action Plan established by the Office of the Comptroller.
This second and final report on San Lorenzo covers the period from November 1, 2018 to December 31, 2021.
Audit Report M-23-19 can be obtained on our website: www.ocpr.gov.pr.
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