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 instances of noncompliance, individually or in the aggregate, are significant but not pervasive.
The one-finding Report reveals that the Municipality granted $9,500 to a nonprofit entity from 2020 to 2022, whose certificate of incorporation had been revoked by the Department of State in 2019. Neither the Finance directors nor the municipal legislature requested the Good Standing of this corporation, which managed an amateur baseball team in Cabo Rojo.
In addition, the acting Finance directors did not request the reports on the use given to the donations, and the first $500 donation was not submitted for the approval of the Legislature, contrary to current law. This situation prevented the Legislature from examining the reasonableness of the donation before it was granted, and the use given to the donations could not be corroborated.
The audit notes that the Municipality paid $171,501 to a former employee and seven employees following a settlement agreement of a lawsuit for political discrimination before the United States District Court. As of April 18, 2023, four civil lawsuits for $974,650 were pending resolution by the courts.
The General Fund budget of the Municipality in 2019 was $15,511,760. This figure rose to $16,397,187 in 2020, $17,469,910 in 2021, $17,531,304 in 2022 and to $18,714,771 in 2023. The Municipality had prepared its financial statements, audited by certified public accountants, which reflected accumulated deficits in the General Fund of $5,979,777 in 2018, $4,979,164 in 2019 and $2,640,110 in 2020, and an accumulated surplus of $274,941 in 2021.
The audit recommends that the director of 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.
Of the audit's objectives, no findings are noted regarding: the acquisition of goods and services, and the disbursements to address the COVID-19 emergency, the disbursements for the purchase of equipment for fishermen, or the contracts granted and the disbursements to address the Hurricane María emergency. This second and final report on Cabo Rojo covers the period from December 1, 2018 to July 31, 2022.
See Audit Report OC-24-29.
To see other published reports, visit our Audit Reports section.
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