Comptroller reveals vacation and sick-leave settlements contrary to law in the Municipality of Arecibo
The Office of the Comptroller of Puerto Rico issued a qualified opinion of the fiscal operations of the Municipality of Arecibo. A qualified opinion is issued when the instances of noncompliance, individually or in the aggregate, are significant, but not pervasive.
The Report reveals that, in contravention of the Municipal Code of 2020, the mayor and 20 employees obtained a benefit not permitted by law due to the fact that they received payments for balances of accumulated vacation and sick leave before separation from the position. The payments were computed between 14 and 45 days before separating from public service. In addition, excess payments were processed: a payment of $1,040 to the mayor; and payments totaling $3,325 (which ranged from $21 to $1,404) to 14 trust employees.
For these findings, it is recommended that the Secretary of Justice and the director of the Office of Government Ethics consider the situations and take the actions that correspond. The mayor is recommended to recover the money paid in excess, and determine the responsibility, if any, of the officials who approved these settlements.
The Report also comments that, in contravention of the Political Code of 1902, an engineer employee with a transitory appointment in Arecibo at the same time maintained a contract with the Department of Economic Development and Commerce (DDEC). The examination of the invoices presented to the DDEC revealed that on 11 occasions the dates conflicted with the regular work schedule in the Municipality. This situation was referred to the presidents of the College and of the Board of Engineers and Surveyors of Puerto Rico, and also to the Secretary of Justice, and to the director of the Office of Government Ethics.
The audit of seven findings notes that, from March 2021 to March 2024, the mayor appointed three employees to occupy positions that are not included in the Classification and Compensation Plan for trust employees. During said period salaries were paid for $232,603. This situation does not allow maintaining an updated system for personnel administration.
The Municipality granted salary differentials to 11 employees without documenting the extraordinary justifications. From January 2020 to August 2023, differentials were granted for the sum of $60,050. This situation does not allow adequate administration on the bases of the personnel merit system.
The Office of the Comptroller's auditors identified that, from January 2021 to January 2024, a corporation whose lease contract for the parking of the Manuel Petaca Iguina Coliseum had expired, continued using the parking lot without having formalized a contract. This situation legally exposes the Municipality, given the nonexistence of documents establishing the rights and obligations between the parties.
The Report reveals that the Urban Center Revitalization Plan that is nourished by the federal funds of the Community Development Block Grant, incentivized with $10,000 a food business that owed $6,400 to the Municipality in overdue rents from 2019 to 2020. The current law and regulations establish that disbursements will not be made to any person, natural or juridical, that has overdue debts with any municipality or with the Government.
The audit reveals multiple deficiencies with the construction works such as, for example: the construction permit for the improvements of the García Park was obtained three months after the project began, and the performance and the payment bond for the Arvaja Sports Complex project was obtained 100 days after the contract was awarded. In addition, the Municipality did not present evidence of the title of the community centers of Río Arriba and Rosa de León. The latter was deteriorated, with animal cages on the exterior part and without maintenance.
Without the consent of the Municipal Legislature, the mayor settled a lawsuit of 2014 for $144,502, for unjustified dismissal of a former employee. Given the noncompliance of the Municipality, a payment plan for the lawsuit was agreed on December 13, 2023, for the new amount of $149,843.
The Report also comments that the Municipality incurred disbursements for $342,781 in salaries not earned and legal expenses for a lawsuit for unjustified dismissal of 2012.
As of March 11, 2024, 15 civil lawsuits for the sum of $28,951,494 were pending resolution by the courts. Another nine cases related to personnel administration were pending resolution by the Public Service Appellate Commission.
The Municipality of Arecibo had not addressed, as of March 31, 2024, the recommendations published in three audit reports of the years 2017, 2018 and 2021, to recover $306,190 for different concepts.
The General Fund budget was $30,529,905, $32,249,405, $45,840,953, $53,495,417 and $52,700,000, from 2020 to 2024, respectively.
The financial statements reflected accumulated deficits of $20,627,896, $11,241,107 and $1,041,150, from 2020 to 2022, respectively, and an accumulated surplus of $807,575 for 2023.
The audit recommends that the director of the Office of Management and Budget ensure that the Municipality of Arecibo complies with the Corrective Action Plan of the Office of the Comptroller of Puerto Rico.
This report of Arecibo covers the period from January 1, 2020 to March 31, 2024.
The Audit Report OC-25-22 can be obtained on our website: www.ocpr.gov.pr.
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