Press Releases

The Comptroller reveals a payment of $376K for useless plan designs and an ordinance and detailing of employees contrary to law in Isabela

The Office of the Comptroller of Puerto Rico (OCPR) issued a qualified opinion on the fiscal operations of the Municipality of Isabela. A qualified opinion is issued when the noncompliances, individually or together, are significant but not pervasive.

The Report reveals that the Municipality of Isabela paid $376,310 to design plans, process permits and carry out the studies required to revitalize the Guajataca Tunnel. The contract, in effect since 2014, was amended four times to extend it through 2019. As of June 30, 2023, the project had not been built, so the investment has had no use.

The seven-finding audit notes that 25 donations totaling $53,987 were made from the Sports Endowment Fund without the approval of the Municipal Legislature from 2022 to 2023. In addition, the Municipality has not transferred the available balance of $6,782 resulting from the sale of a high-performance 2018 SUV, which by Resolution was to be allocated to this fund.

The audit found that, as of December 20, 2023, the Municipality had not invoiced or required the company $10,466 corresponding to the 20% established in the contract. As a result of the investigation by the Comptroller of Puerto Rico's auditors, the Municipality invoiced and received the indicated funds from the company administering the municipal landfill. This had the effect of not receiving $10,466 in time to address the needs of its constituents.

The Report reveals that the accountants of the Municipality's Office of Finance and Budget did not encumber the budgetary credits for the payment of 90% of the contracts and 33% of the amendments examined, for $853,379. The Municipality must ensure that budgetary appropriations are encumbered at the time of granting a contract so that there is an available balance to cover the disbursements. The encumbrances were recorded 13 to 195 days later.

From January 1, 2019 to March 31, 2023, the Municipality of Isabela had formalized 2,801 contracts and amendments for $62.5 million. This situation could cause overdrafts and unnecessary litigation for the Municipality.

The auditors detected that a collaborative agreement granted on August 2, 2021, was not registered with the OCPR within 15 days of being granted, but 896 days later. In addition, copies of four amendments granted in 2021 were registered with delays of up to 50 days. These situations prevented these public documents from being accessible to the citizenry as provided by current regulations.

In contravention of the 2020 Municipal Code and the 1991 Municipalities Act, the Municipal Legislature authorized the Centro Isabelino de Medicina Avanzada (CIMA-EM) not to return the initial capital for its operation, which amounted to $1.9 million in cash and $480,750 in property. In addition, the Municipality, without legal authority, designated 11 employees on detail to perform the functions of their position at CIMA-EM. Municipal enterprises such as CIMA-EM are considered for-profit corporations with their own legal personality, so the laws and rules of the private sector apply to their employees.

In fact, the mayor's executive assistant certified that the five-member Board of Directors of CIMA-EM was composed of four members from 2016 to 2019 and did not have a representative of the public interest from 2021 to 2022.

Isabela's budget increased from $12.6 million in 2019, to $12.6 million in 2020, $12.9 million in 2021, $16.1 million in 2022, and $16.6 million in 2023. Its financial statements reflected accumulated surpluses of $35.1 million in 2019, $35.1 million in 2020, $35.5 million in 2021, and $37.5 million in 2022. 

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 Isabela covers the period from January 1, 2019 to June 30, 2023.

Audit Report OC-25-88 is available on our website: www.ocpr.gov.pr