Press Releases

Comptroller reveals deficiencies in property transactions and accounts receivable in Vega Alta

The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Vega Alta. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant, but not pervasive.

The Report reveals that the Municipality sold for $1,760,000 through a public bid the industrial property El Morro Corrugated Box Corporation, acquired in 2015 for $1,700,000. The sale was carried out with a valuation report from a private appraiser, that had been issued more than a year earlier, and had not been evaluated by a reviewing appraiser as provided by the Regulation on real estate valuation reports of 2016. In addition, a copy of this transaction was submitted 10 months late to the Contracts Registry of the Office of the Comptroller.

The audit of six findings notes that the Municipality purchased in 2016 three hydraulic car lifts for $16,495 that were never used and are deteriorated. The municipalities must plan the projects to determine their viability, before investing resources in the acquisition of equipment.

As of May 20, 2024, the Municipality had not registered with the Federal Aviation Administration one of the drones acquired in 2023. The other drone fell and suffered damages in an activity, while it was operated by an official who does not have the remote pilot certification to operate unmanned aircraft. This equipment was acquired with CDBG-DR funds, for $5,729. It is recommended that the director of operations of the Federal Aviation Administration of San Juan consider this situation and take the measures that correspond.

From the examination conducted on a sample of 44 files of patent taxpayers with accounts receivable and adjusted accounts receivable, it was found that the finance directors in office forgave debts for $9,798 to nine taxpayers without the approval of the Legislature. Two forgivenesses were made during the administration of the former mayor, and seven in the administration of the current mayor. A similar situation had been commented on in Audit Report M-21-14 of 2020.

The auditors identified 240 units of properties registered in the Fixed Assets module of the registry of movable and immovable property, with 71 repeated property numbers. In addition, the loss of property for $15,279 after a break-in at the Municipal Mausoleum had not been investigated, nor had the property been removed from the registry.

The Municipality had not regulated the contracting of bonds and insurance, as of October 31, 2023, despite the fact that from 2020 to 2024, it had acquired five insurance policies for $3,320,345. It also did not have regulations to establish controls for disbursement processes, collections, accounts receivable, or municipal property accounting.

The Report comments that the Municipality paid $9,884 to a municipal employee, after an agreement for a civil lawsuit of discrimination for impairment and retaliation. In addition, eight civil lawsuits filed against the Municipality are pending resolution in the courts for $1,039,000.

The Municipality of Vega Alta has not addressed the recovery recommendation of $21,750 indicated in Audit Report M-18-01 of 2017. A similar situation had been noted three years later in Audit Report M-21-14 of 2020.

The Municipality's General Fund budget was $13,372,211, $12,018,560, $12,131,452, $13,092,905 and $13,442,291, from 2020 to 2024 respectively.

The Municipality had prepared its financial statements, which reflected accumulated surpluses of $5,375,126, $8,816,063, $8,261,610 and $12,129,294, from 2020 to 2023.

The audit recommends that the director of the Office of Management and Budget ensure that the Municipality of Vega Alta complies with the Corrective Action Plan of the Office of the Comptroller of Puerto Rico.

This report covers the period from March 1, 2020 to December 31, 2023.

The Audit Report OC-25-20 can be obtained on our website: www.ocpr.gov.pr.