Internal control deficiencies in the administration of Maunabo
The Office of the Comptroller of Puerto Rico issued a qualified opinion on the fiscal operations of the Municipality of Maunabo. A qualified opinion is issued when the noncompliances, individually or together, are significant but not pervasive.
The Report reveals that the Internal Audit Unit of Maunabo did not carry out audits in the areas of materiality and risk from 2019 to 2022. To this effect, the Municipality did not have the information necessary to determine the effectiveness and efficiency in the use of resources in purchases, accounts payable, disbursements, and contracts, among others. A similar situation had been commented on in Audit Report M-20-01 of July 8, 2019.
The three-finding audit notes that the minutes and the corresponding files for 18 months of the Bidding Board meetings held from 2019 to 2020 were not found. According to the information available in the archive and in the Minutes Book, the last one was prepared on June 6, 2017, and the next was from March 24, 2021. Upon examining the Detailed Report of Purchase Orders, two bid notices, a Request for Proposal, and the payment of a per diem to the private citizen member of the Board were identified. These deficiencies prevent maintaining permanent and reliable records of the Board's agreements.
On the other hand, the Municipality lacks standards for preserving or disposing of fiscal documents; the last Inventory and Retention Plan was done in 2002, and the designated archive area did not have humidity and temperature control equipment. Municipalities must protect public documents as evidence of fiscal and administrative procedures. Otherwise, these can be lost and/or deteriorate.
The audit comments that the Municipality of Maunabo had to return $142,065 to the US Department of Housing and Urban Develompment (HUD) because it did not hold a public bid to carry out the construction work for the municipal gymnasium that was funded with federal funds.
As of April 30, 2024, a civil lawsuit for $456,000 was pending resolution by the court. In addition, a case filed by an employee before the Public Service Appeals Commission was also pending resolution.
The Municipality has not recovered $93,476 indicated in three audit reports, the M-18-06 of 2017, the M-20-01 of 2019, and the M-21-23 of 2020. As of June 30, 2022, these recommendations had not been addressed.
The Municipality's General Fund budget was $7,805,250, $7,250,256, and $6,070,501, from 2020 to 2022, respectively. The Municipality had its financial statements prepared, which reflected accumulated deficits of $1,551,744, $1,788,527, and $772,407 from 2020 to 2022, respectively.
The audit recommends to the director of the Office of Management and Budget that he ensure that the Municipality of Maunabo complies with the Corrective Action Plan of the Office of the Comptroller of Puerto Rico.
This first report of Maunabo covers the period from July 1, 2019, to June 30, 2022.
The Audit Report OC-25-13 can be obtained on our website: www.ocpr.gov.pr.
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