The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Juncos. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant but not pervasive.
The Report reveals that the Municipality of Juncos acquired in 2009 the facilities of the former Colegio Corazón de María for $2,500,000 to develop a school of vocational courses and to include an area for children with disabilities. The Government Development Bank approved the financing for $2,535,000 and the Municipal Legislature authorized the purchase-sale option.
However, the mayor modified the initial purpose of the purchase without the Legislature's approval and built two hotel-type rooms in 2019. As of February 1, 2022, the hotel project was halted, and on April 25, 2022, the Municipal Legislature approved the change of use to build a hotel.
The college building has been used to offer workshops, sports practices and provides office space to the Department of the Family. However, to develop the hotel project, the Municipality did not conduct a feasibility and marketing study. This situation is attributed to the lack of adequate planning before investing resources.
The Internal Audit Unit certified in 2021 that it had not conducted audits of the Municipality's information systems. This finding has the effect that management does not have information on the operation of the mechanized accounting system. A similar situation had been commented on more than four years ago, in Audit Report M-18-39 of June 15, 2018; in addition, it is the fourth time that the Office of the Comptroller has identified this situation in the last 10 years.
The five-finding audit points out that the quotes for 67% of the construction projects examined that did not require bids did not include the name, title, signature and date of receipt of the official who awarded the project. This information required by the Municipal Regulation is necessary in order to assign responsibility, if necessary.
The auditors identified, in one contract and two amendments out of the nine examined, that the contractor was not required to provide the bonds that guarantee its compliance. The officials also could not locate or show the delivery of a bond for another contract. This situation prevents the Municipality from having guarantees in case of breach by the contractors.
The Report discloses that the director of Finance of Juncos did not obligate the budgetary credits prior to granting 10 contracts and eight amendments for $1,217,381 from 2017 to 2021. These obligations were recorded up to two months after the contracts were granted.
The audit comments that the Municipality of Juncos contracted in 2018 and paid $27,000 for engineering services to a corporation legally barred from performing these services since it was not constituted as a professional corporation. In this regard, it is recommended that the presidents of the College and of the Board of Engineers and Surveyors of Puerto Rico, and the secretary of Justice, consider this situation and take the measures they deem pertinent.
The audit also recommends that the Office of Management and Budget ensure that the Municipality complies with the Corrective Action Plan established by the Office of the Comptroller. This first report on Juncos covers the period from July 1, 2017 to June 30, 2021.
See Audit Report M-23-25.
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