The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Lares. 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 Lares carried out a construction project of platforms for niches in the municipal cemetery without obtaining the Single Permit. Act 161-2009, Act for the Reform of the Permit Process of Puerto Rico, establishes the prerequisites to approve and authorize, among others, the Single Permit, which is necessary to begin or continue construction, alteration or demolition of works. In addition, the construction permit for the improvements to the Julio C. Morales athletic track, for $183,384, was obtained six months after the work began. Because of these situations, the Permit Management Office could not exercise its regulatory function prior to the start of construction.
The five-finding audit points out that in six of the 14 quotes received for three of the five projects examined, the official who requested and accepted the quotes was not identified. These deficiencies foster, among other things, irregularities in the processes.
The Comptroller's auditors identified that two agreements between the Municipality and a nonprofit entity, to establish and administer the Multiple Services and Elderly Center, were not approved by the Municipal Legislature prior to their formalization in 2019 and 2020. In addition, the 2019 agreement was not submitted to the Contracts Registry of the Office of the Comptroller, and the 2020 agreement was registered two and a half years after its formalization.
The Municipality of Lares did not maintain continuous and effective oversight of its finances and operations since the Internal Audit Office did not conduct audits covering the areas of materiality and risk, for example, in the purchases and disbursements with the funds to address the COVID-19 emergency. The Audit Commission of the Municipal Legislature also did not exercise its oversight function since, in the three meetings it held from 2019 to 2021, it did not evaluate the audited financial statements, nor an internal audit report on the Municipality's in-home support services.
The Report discloses that the Municipality did not notify the Office of the Comptroller of Puerto Rico of accidents and thefts as provided by Regulation 41. For the audited period, 46 of the 55 incidents were not reported, and administrative investigations were not conducted in 34 incidents. These instances of noncompliance prevent the Municipality from determining the causes of the incidents and taking the corresponding measures, among others.
The audit publishes deficiencies with the minutes of the Municipal Legislature that do not allow for a permanent and reliable record of the agreements. For example, unsigned, unbound and partially transcribed minutes were found. In addition, as of May 2, 2022, the Municipality of Lares had not established a regulation for the administration of confidential personnel, nor a regulation for the use of the biometric time clocks. These situations may give rise to personnel processes being carried out without complying with the provisions of the law.
The Report recommends that the Office of Management and Budget ensure that the Municipality of Lares complies with the Corrective Action Plan established by the Office of the Comptroller. This first report on Lares covers the period from January 1, 2019 to June 30, 2022.
See Audit Report M-23-27.
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