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The Comptroller of Puerto Rico issued a qualified opinion of 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 that the Municipality amended the $84,500 contract for the construction of a fence and three meshes at the Juan Pachín Vicens Auditorium, without having requested quotes for the additional construction of three porticoes for $60,000.  This situation, contrary to current law, prevented the Municipality from having alternatives of better offers for its consideration.

The five-finding audit notes multiple deficiencies with the bank reconciliations and the inventories of receipts and checks. For example, as of June 15, 2022, the preparation of the reconciliations of the Payroll and Concentration accounts was six months behind, and the reconciliation of the Disbursement account, nine months behind. In addition, the municipal treasurer, upon assuming responsibility for the handling of the blank checks and the collection booklets, did not conduct an inventory, and the accountant delegated to prepare the Monthly Report of Revenues and Disbursements did not print the Monthly Report or seek the approval of the Finance director.

On the other hand, a transfer of credits for $649,050 was made without the authorization of the Legislature on February 5, 2020. To carry out this transfer, which reduced the budget appropriations of 39 line items, a resolution was used that was not signed by the then mayor. This situation does not allow maintaining control of the balances in the budget funds and line items, among others.

The auditors found that 77% of the files of the participants of the Economic Assistance Program for the payment of mortgages in arrears were missing the certification or letter validating that the participants had not received assistance from another federal program. This percentage represented the amount of $97,485 in payments to the banks. The Program assisted homeowners affected by the economic crisis following the COVID-19 pandemic. This deficiency could adversely affect future allocations of federal funds.

The Municipality's property officer did not conduct the annual physical inventory of movable property from 2019 to 2021. A similar situation had been noted in Audit Report M-21-24 of October 29, 2020.

The audit notes that the Municipality had to pay $100,000 to the United States Department of Energy, for having contracted professional services for the installation of a photovoltaic system without having obtained at least three proposals. This finding of noncompliance with the federal regulation, published in Audit Report M-16-49 of 2016, prompted the reclamation of these funds from the Energy, Efficiency and Conservation Block Grants.

In addition, the Municipality had to pay $50,000 to settle the lawsuits filed by municipal employees. This disbursement diminished Ponce's resources to address other needs and services for the citizens.

As of August 30, 2022, 17 civil lawsuits filed against the Municipality were pending resolution by the courts for the sum of $4,709,215. 

The audit recommends that the director of 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.

The General Fund budget of the Municipality was $82,733,960 for 2018, $82,436,605 for 2019, $82,546,631 for 2020, $93,852,685 for 2021 and $92,342,794 for 2022.

The audited financial statements reflected accumulated deficits of $48,311,306 for 2018, $33,058,781 for 2019, and $21,904,236 for 2020. For fiscal years 2021 and 2022, the financial statements reflected surpluses of $3,605,502 and $5,774,487, respectively. This second and final report on Ponce covers the period from January 1, 2018 to December 31, 2021.

See Audit Report OC-24-27.

To see other published reports, visit our Audit Reports section.