The Office of the Comptroller of Puerto Rico (OCPR) issued an adverse opinion of the fiscal operations of the Municipality of Salinas. The tests performed and the evidence revealed that the operations related to the efficient administration of the municipal personnel system, the disbursements for debris collection, and the contracting of professional services, among others, were not carried out, in all significant aspects, in accordance with the applicable law and regulations.
The Report reveals that the Municipality paid $42 thousand in sick leave to nine employees from 2019 to 2022, in violation of Ordinance 10 of 2018, which indicates that employees who leave the government will only be entitled to the payment of vacation leave. This situation is attributed to the fact that the Human Resources directors departed from their duty and from the provisions of the Ordinance.
The eight-finding audit notes that 25 employees held 18 career positions, one trust position, and one in the Municipal Police, from 2018 to 2021, without being contemplated in the classification and compensation plans. These employees, appointed by the former mayor, a former Human Resources director, and by the mayor, received $1.2 million in salaries, differentials, Christmas bonuses, back-to-school bonuses, and premium pay. This situation prevented the Municipal Legislature from approving the creation of positions, which, should the actions be null and void, would make their salaries illegal.
The auditors detected deficiencies with the accrual of compensatory time and the recording of overtime hours. From a sample of the payment of 23,946 overtime hours for $334 thousand from 2018 to 2021, $6,512 was disbursed for 435 overtime hours to four employees, and 116 overtime hours were not deducted from the compensatory time balance of five employees. The then Human Resources director was unaware of the administrative procedures regarding the recording of overtime hours and the accrual of compensatory time, as provided by the Municipality's Personnel Regulations and The Fair Labor Standards Act of 1938.
The Municipality of Salinas paid $11,471 in excess of what was contracted to a federal reimbursement request corporation for data entry task payments, and $1,120 in excess for on call services not stipulated in the contract with a physician of the Accessible Health Services Program. In addition, prior to the registration of contracts and amendments at the OCPR, the Municipality disbursed $107 thousand to contractors in violation of the current regulations.
The Report publishes that the Municipality did not report to the Department of the Treasury payments of $300 thousand in the informative returns of two debris collection service contractors. The Municipality of Salinas also did not prepare the informative returns of the payment to two contractors for $43 thousand for tax year 2019. This situation encourages tax evasion, and the Municipality may be subject to penalties for failing to comply with the provisions of law and regulations.
In the physical inspection of the purchase of 40 laptop computers acquired for $44 thousand with COVID-19 CARES Act funds, one of the laptops valued at $1,099 was not located. In addition, neither the purchasing coordinator nor the director of the Office of Emergency Management certified having received the purchase as requested. This fact fosters the improper use of property.
In violation of the Municipal Code of 2020 and the Municipal Regulations of 2016, the requisition for the purchase of three vehicles for $108 thousand specified the required make and models, and the nine quotes received did not identify the employee who requested, received, and accepted the quotes. Due to these deficiencies, competition was limited and irregularities may have been committed.
Salinas's budget was $10.2 million in 2019, $9.9 million in 2020, $9.7 million in 2021, and $9.7 in 2022. The financial statements reflected accumulated surpluses of $403 thousand in 2018, $1.5 million in 2019, $1.3 million in 2020, and $828 thousand in 2021.
The Report recommends that the director of the Office of Management and Budget ensure that the Municipality complies with the Corrective Action Plan established by the OCPR.
This second and final Report on Salinas covers the period from July 1, 2018 to December 31, 2021.
Audit Report OC-25-54 can be obtained on our website: www.ocpr.gov.pr.
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