Comptroller reveals control deficiencies with disbursements and property in Bayamón
The Office of the Comptroller of Puerto Rico (OCPR) issued a qualified opinion on the fiscal operations of the Municipality of Bayamón. A qualified opinion is issued when the noncompliances, individually or together, are significant but not pervasive.
The Report reveals that, from a sample of the vouchers examined, all of them lacked the approval signatures of the finance director and the official payer. In particular, 88% of the purchase orders for green-area maintenance services did not have the finance director's signature, and 17% of the disbursement vouchers for the payment of withheld contributions did not have the signature of the official payer or of the finance director.
In addition, 80% of the disbursement vouchers were not marked as paid and, in 30%, they did not include the date on which the services were rendered. From 2018 to 2022, the Municipality issued 252,688 disbursement vouchers for a total of $717.4 million.
These deficiencies render the established internal control inoperative. In addition, they foster the commission of errors or irregularities and made it difficult to verify in detail whether the disbursements were made correctly.
The four-finding audit notes that, as of December 13, 2022, the then deputy mayor and two principal executive assistants had not sent to the Secretary of Justice the documents regarding 58 lawsuits filed in the courts against the Municipality from 2018 to 2022. The Civil Lawsuits Registry Act of 2003 requires, among other things, that the Secretary of Justice be notified of every civil claim by or against the Municipality that is related to the functions of its office and whose amount exceeds $5,000. In this regard, the Secretary of Justice is recommended to evaluate the situation discussed and to consider preparing the regulation required by law for the creation of the Civil Lawsuits Registry.
On the other hand, the auditors detected that the Audit Affairs Committee of the Municipal Legislature did not evaluate the OCPR audit reports M-20-05 of 2019, M-21-12 of 2020, or M-22-13 of 2021. They also did not evaluate the financial statements audited by certified public accountants for fiscal years 2018 to 2020. This situation prevents the continuous and effective oversight of the Municipality's finances and operations.
In violation of the 2016 Municipal Regulation, the property officer did not conduct the annual physical inventories of movable property from 2018 to 2021. In addition, six property thefts with a book value of $37,910 were reported to the OCPR with delays of up to two and a half years. Current law provides that the entity has 10 business days to report the loss of property.
The Report comments that, as of June 30, 2022, 18 civil lawsuits for $2.7 million were pending resolution by the courts. In addition, two cases filed by employees were pending resolution before the Public Service Appeals Commission and the Equal Employment Opportunity Commission.
Bayamón's budget, of $116.6 million in 2019, $118 million in 2020, and $121.7 million in 2021, rose to $127.4 million in 2022. The financial statements reflected accumulated surpluses from 2019 to 2022 of $27 million, $41.2 million, $33.7 million, and $40.5 million, respectively.
The audit 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 first report covers the period from November 1, 2018, to June 30, 2022.
Audit Report OC-25-69 is available on our website: www.ocpr.gov.pr
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