The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Cabo Rojo. A qualified opinion is issued when the noncompliance, individually or as a whole, is significant but not pervasive.
The Report reveals that in 2020 the Municipality paid $17,625 to the former mayor for the accumulated excess of vacation leave in 2015 and 2016. Current law provides that excess accumulated days, if not used, become void on June 30 of the following calendar year. This situation was referred to the Secretary of Justice on May 8, 2023, so that the corresponding actions may be taken.
The five-finding audit notes that the Municipality contracted professional property appraisal services with contractors who did not hold the license required by law. The Municipality did not verify that the president of the corporation and the subcontracted individual held the professional real estate appraiser license of Puerto Rico. This situation was referred on May 8, 2023, for consideration by the president of the Examining Board of Professional Real Estate Appraisers and the Secretary of Justice.
In addition, the Municipality did not notify the Municipal Revenue Collection Center of its collection efforts for property taxes and appraisals of residential properties. This situation, required by regulation, prevents the duplication of efforts by both entities.
The Report discloses that the Municipality does not have an operations plan for the management of the municipal landfill approved by the Environmental Quality Board, and it did not require the contractor to provide an emergency plan and health and safety procedures, nor a public liability policy as the contract provided. In fact, the Municipality rescinded the contract with the operator in December 2021, after the company's president admitted guilt for criminal acts under federal statutes.
The auditors found that the Municipality did not withhold $57,723 in withholding for the service provided by two foreign—non-U.S.—for-profit limited liability companies, nor from the company that managed the landfill. This situation, contrary to the Internal Revenue Code of Puerto Rico, may result in the imposition of fines on the Municipality.
The Municipality did not conduct administrative investigations of 28 of the 34 accidents involving 32 municipal vehicles that occurred from 2018 to 2021. The lack of detailed information about the accidents does not allow responsibility to be assigned to negligent employees or officials, and it encourages similar situations to occur. In addition, these accidents were not reported to the Office of the Comptroller of Puerto Rico as provided by Regulation 41, Notification of Losses or Irregularities in the Handling of Public Funds or Property.
The Report comments that in 2021 the Municipality paid $149,431 to two companies for the development of a smart city project and digital platforms such as the Cabo Rojo City on Premise application. This disbursement had no usefulness whatsoever, since the mayor canceled the contracts due to the Municipality's deficit-ridden economic situation.
In addition, the Municipality recovered $78,355 from the company that operated the municipal landfill for municipal license taxes from 2017, use of services, and the 20% established by contract on the income not reported by the company from 2017 to 2021.
The audit recommends that the Office of Management and Budget ensure that the Municipality of Cabo Rojo complies with the Corrective Action Plan established by the Office of the Comptroller.
This first report of Cabo Rojo covers the period from December 1, 2018, to July 31, 2021.
The Audit Report OC-24-04 can be found on our website: www.ocpr.gov.pr.
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