Comptroller reveals deficiencies in sick leave payments and collectors without appointment in Adjuntas
The Office of the Comptroller of Puerto Rico (OCPR) issued a qualified opinion on the fiscal operations of the Municipality of Adjuntas. A qualified opinion is issued when the noncompliances, individually or as a whole, are significant but not pervasive.
The Report reveals that the Municipality of Adjuntas, without legal authority, made disbursements of $9,602 to three former officials and one former employee, for sick leave days accumulated in excess of the 90 days. This payment constitutes 8% of the examined sample of liquidation of accumulated vacation and sick leave from December 23 to 28, 2020. The Municipal Code of 2020 establishes that unused vacation days may be paid in a lump sum upon resignation from public service, but not the sick days accumulated in excess of the 90 days.
The seven-finding audit notes that collection operations were carried out by Municipality personnel without written authorization and without appointment of collectors as titleholders. From January to September 2021, these officials collected $8,415,618 in construction excise taxes, sales and use tax, and business license taxes, among others. This situation prevents adequate control and encourages errors or irregularities with the funds.
The auditors identified that the Municipality's Internal Audit Office did not conduct periodic audits in the areas of collections, municipal accounting, purchases, and disbursements, among others. In addition, as of May 1, 2023, the internal auditor had not prepared the annual work plans. The Audit Affairs Commission of the Municipal Legislature, which was established on January 20, 2021, also did not exercise its oversight function and remained inoperative. This situation is similar to the findings noted in audit reports M-18-21 of 2018 and M-23-07 of 2022 published by the OCPR.
The Municipality of Adjuntas does not have updated information on the financial situation and the result of its operations, since the contracts to prepare the financial statements were formalized up to 13 months after the established dates. In addition, the 2021 audited financial statements were submitted to the Federal Audit Clearinghouse six months after the date established by federal regulation, and as of December 5, 2023, the Municipality had not received the 2022 audited financial statements. This situation may adversely affect the Municipality's receipt of federal funds.
In violation of current law, the bank reconciliations of 36 accounts were performed with delays of almost two years. In addition, from January 2021 to June 2023, the Municipality had not prepared the bank reconciliations of the Business Licenses in Suspense account. In this account the collections for business license income received in advance are deposited, which as of March 8, 2023, had income of $3,626,240.
The Report reveals multiple deficiencies with the collection operations in Adjuntas, and that the personnel regulations had not been updated to align them with the Municipal Code of 2020.
The Municipality's General Fund budget rose from $5,846,742 in 2021, to $6,826,441 in 2022, and to $7,350,628 in 2023. The Municipality had its 2021 financial statements prepared, audited by certified public accountants, which reflected an accumulated surplus of $7,461,714.
The audit recommends that the director of the Office of Management and Budget ensure that the Municipality of Adjuntas complies with the Corrective Action Plan of the Office of the Comptroller of Puerto Rico.
This first report of Adjuntas covers the period from January 1, 2021, to June 30, 2023.
The Audit Report OC-25-03 can be obtained on our website: www.ocpr.gov.pr.
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