The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Ponce. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant but not pervasive.
The Report reveals the finding of a passenger bus that cost $187,777 in 2012 and a trolley that cost $116,000 in 2006, abandoned in a private repair shop since 2014 (see photos in exhibits 1 and 2 of the Report). The Municipality has a fleet of 556 motor vehicle units and 35 heavy equipment units. In addition, the Municipality did not keep the files of the repairs and maintenance expenses of the vehicles. These situations foster the deterioration of the vehicles and the commission of errors in the repair services.
The four-finding audit points out that the Municipality owed $2,890,806 to an insurer of the municipal employees' health plan, and $20,237,627 to the Aqueduct and Sewer Authority, to the Electric Power Authority, to the Retirement Board and to the Department of Labor and Human Resources. This situation caused the Municipality to have to pay $683,626 in interest and surcharges, a fact that further aggravated its fiscal situation and the possibility that, due to the debts, the employees would not have access to the benefits to which they are entitled.
The auditors disclosed that the Transportation Regulation had not been updated with the provisions of Act 107-2020, Municipal Code of Puerto Rico and with the Municipal Regulation in the sections on the use and control of motor vehicles, vehicle mechanic and repair services, and on the organizational and administrative changes of the Municipality.
The Report also publishes that the Commission on Finance, Budget and Comptroller Affairs of the Municipal Legislature did not exercise its oversight function. In the three meetings held from 2019 to 2020, they did not evaluate two audit reports of the Office of the Comptroller, nor the audited financial statements of 2017-18 and 2018-19, nor the seven reports issued by the Municipality's Internal Audit Office. The former president of the Municipal Legislature indicated that the reports that did not have findings directed at the Municipal Legislature were not evaluated.
The audit issues a special comment on the judicial process against the mayor. In particular, on April 11, 2023, the Panel on the Independent Special Prosecutor (PFEI) issued a resolution indicating that the Comptroller of Puerto Rico referred to the secretary of Justice a communication establishing the alleged assignment of two officials to request monetary contributions from confidential employees and other employees. It is alleged that this action had the purpose of making the payments of a personal loan from the electoral campaign, as well as other expenses of a personal nature.
In addition, the existence of a kick back scheme is alleged, through which the mayor assigned other officials to request money from the employees appointed in the Municipality. The PFEI determined to assign an independent special prosecutor and a delegate prosecutor to conduct the investigation of the established facts.
The Report recommends that the Office of Management and Budget ensure that the Municipality of Ponce complies with the Corrective Action Plan established by the Office of the Comptroller.
This first report on Ponce covers the period from January 1, 2018 to June 30, 2021.
Audit Report M-23-26 can be obtained on our website: www.ocpr.gov.pr.
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