The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Naguabo. A qualified opinion is issued when the instances of non-compliance, individually or in the aggregate, are significant but not pervasive.
The Report reveals that the Municipality contracted two corporations to provide project inspection services, but since they were not established as professional corporations, they could not practice engineering. The Municipality paid them $66,430 for the inspection of the rehabilitation of the Daguao basketball court and baseball park, and of the baseball park of the Diplo II Development.
In addition, two agents of the corporations and one of the senior executives were not members of the College of Engineers and Surveyors of Puerto Rico, nor were they licensed as engineers by the Examining Board of the Department of State. The Municipality also did not request or obtain a copy of the professional licenses of those contracted.
This situation was referred on December 9, 2022, to the Secretary of Justice and to the president of the College of Engineers and Surveyors of Puerto Rico. As of the date of this Report, these situations were pending investigation.
The three-finding audit notes that the Municipality acquired heavy equipment, trucks, and vehicles through auctions outside Puerto Rico, which have had little or no use. $575,558 was invested in 23 pieces of equipment, of which 16 were not working. In addition, from 2018 to 2021, $56,113 had been disbursed to repair nine of the 18 trucks. In fact, one of the trucks, a 2005 Ford F750, had mechanical defects from the time it was purchased.
The auditors detected that the official appointed to the position of Press and Communications officer provided false information about her academic preparation. She indicated in her documents that she had an associate degree in Radio Production, a bachelor's degree, and studies leading to a bachelor's degree in Telecommunications. Her official transcript only reflects that she obtained the associate degree.
The official also lied to the Appointments Commission of the Municipal Legislature, since she indicated that she met the requirements and experience of the position, which in fact she held for nearly 15 months from 2021 to 2022.
This situation was referred to the Secretary of Justice on December 15, 2023, and to the executive director of the Office of Government Ethics so that they may take the actions they deem pertinent. The official's actions could constitute the crimes of ideological falsehood and usurpation of public office classified in the Penal Code of Puerto Rico of 2012.
The Report comments that, as of December 31, 2021, seven civil lawsuits totaling $1,184,288 were pending resolution by the courts. In addition, the Municipality had not recovered $65,214 for various items in response to the recommendations of audit reports M-12-05 of 2011 and M-16-40 of 2016 of the Office of the Comptroller.
The General Fund budget of the Municipality, in fiscal years 2019 to 2022, was $8,160,666, $8,308,475, $8,616,315, and $8,261,325, respectively. The financial statements audited by certified public accountants for 2019 and 2020 reflected accumulated surpluses of $4,521,109 and $5,079,523.
The Report recommends to the director of the Office of Management and Budget to ensure that the Municipality complies with the Corrective Action Plan established by the Office of the Comptroller of Puerto Rico. This report of the Municipality of Naguabo covers the period from July 1, 2018, to December 31, 2021.
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