Deficiencies in the failure to prepare bank reconciliations in Orocovis
The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Orocovis. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant but not pervasive.
The Report reveals that from 2018 to 2023, the Municipality did not prepare bank reconciliations for four bank accounts related to funds from the Federal Emergency Management Agency-FEMA, the Puerto Rico Aqueduct and Sewer Authority-AAA, and stamps and vouchers. The accounts recorded balances fluctuating between $10 and $13,024.
The failure to perform bank reconciliations does not allow the Municipality to have updated, complete, and reliable information on its financial situation and the results of its operations.
The one-finding audit comments that the Municipality disbursed $41,316 to a municipal employee following a settlement agreement in a civil lawsuit for sexual harassment, sex- and gender-based discrimination, and retaliation that was agreed to in 2020. This information was forwarded to the Office of Government Ethics on February 8, 2024 for its evaluation and corresponding action.
As of December 31, 2022, Orocovis had two civil lawsuits for $450,000 pending resolution by the courts.
The Municipality's General Fund budget was $8,865,636 in fiscal year 2019, $9,237,786 in 2020, $7,894,615 in 2021, $7,272,566 in 2022, and $6,954,571 in 2023. The audited financial statements reflected accumulated surpluses of $7,825,675, $7,962,587, $8,050,351, $9,636,259, and $11,474,750 corresponding to fiscal years 2019 through 2023 respectively.
The Report recommends that the director of the Office of Management and Budget ensure that the Municipality of Orocovis complies with the Corrective Action Plan established by the Office of the Comptroller of Puerto Rico. This first report on Orocovis covers the period from January 1, 2019 to December 31, 2022.
Audit Report OC-24-55 is available on our website: www.ocpr.gov.pr
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