The Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Vieques. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant but not pervasive.
The Report reveals multiple deficiencies with the credit transfers between budget line items. For example, the mayor approved two executive orders to make 21 credit transfers for $101,846, between 2018 and 2019, that were not approved by the Legislature. These orders reduced the budget appropriations of 21 personnel-services line items. This situation is attributed to the fact that the acting Finance director stated that the president of the Municipal Legislature did not respond to him and, in turn, the latter stated that they summoned the Finance director but that he did not appear.
These situations of inadequate control also occurred when the Finance directors did not issue surplus certifications or those issued did not contain the required information. In addition, the then Finance director recorded in the accounting system five transfers between line items up to 28 days before the approval of the executive orders, and the then mayor also authorized a bank transfer that affected the payment of the amortization of the accumulated deficit, in order to increase the line item for the expenses of the patron-saint festivities.
The five-finding audit notes that the contracting of professional services for the audit of the financial statements from 2019 to 2021 was executed with delays of up to 14 months. These delays affect the start of the audit, the delivery of the certification required by law, the delivery of the audited financial statements and the contracting of the services in subsequent years. This situation may also affect the allocations of federal funds.
In fact, as of May 13, 2021, the Certification of Compliance with Act 273-2003 for fiscal years 2017 to 2019 had not been submitted to the Office of the Comptroller of Puerto Rico. The entity indicated, among other things, that the lack of electricity, and the problems with the telephones, the internet and communication in general, delayed the work.
The Municipality of Vieques granted $10,000 to a nonprofit organization dedicated to animal rescue, whose draft resolution was still pending approval by the Legislature, a year after its presentation, due to the lack of required information. In addition, the Municipality did not request from the entity a detailed report of the expenses made with the donation.
The Report also reveals multiple deficiencies with the filing of inactive public documents. The Municipality does not have written rules and procedures for the conservation and disposal of fiscal documents. In addition, the area does not have adequate ventilation, an air conditioner, or emergency lights, among others.
The audit publishes a special comment on the payment of $250,000 to 22 employees who had sued for dismissal or non-renewal of contract. This disbursement, without receiving any benefit in return, affected Vieques' resources to provide services to the citizens.
As of August 31, 2021, nine civil lawsuits for $1,088,920 were pending resolution by the courts.
The audit recommends that the director of the Office of Management and Budget ensure that the Municipality of Vieques complies with the Corrective Action Plan established by the Office of the Comptroller.
The General Fund budget of the Municipality was $12,454,076 for 2019, $11,402,895 for 2020 and $13,085,497 for 2021. The audited financial statement for fiscal year 2017 reflected an accumulated deficit of $1,045,242. The financial statements from 2018 to 2019 reflected accumulated surpluses of $1,420,179 and $329,112 respectively. This first report on Vieques covers the period from July 1, 2018 to August 31, 2021.
See Audit Report OC-24-26.
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