Comptroller of Puerto Rico reveals possible illegal misappropriation by a collector
and lack of controls over disbursements in the Municipality of Luquillo
The Office of the Comptroller of Puerto Rico (OCPR) issued an adverse opinion on the fiscal operations of the Municipality of Luquillo related to the collections and disbursements of the debris collection and disposal contract for the emergency of Hurricanes Irma and María. The tests carried out and the evidence revealed that these operations were not carried out in all significant respects, in accordance with applicable law and regulation.
The Report reveals possible embezzlement and aggravated illegal misappropriation on the part of a collector who did not deliver $5,841 to the official collector nor deposit it in the Municipality's accounts. In addition, the collector did not record 22 manual receipts in the computerized accounting module Ingresys, of the Integrated Solution for Advanced Municipalities system, and canceled 47 receipts with false information, after having collected the money.
Through these actions the collector could have committed, among others, the crimes of aggravated illegal misappropriation, computer fraud, ideological falsehood and embezzlement. This situation was referred to the Secretary of Justice and to the director of the Office of Government Ethics on April 30, 2025.
This examination was carried out on a sample of 611 receipts of a total of 22,309 that were issued from 2018 to 2023, totaling $68,776,160 million.
The audit of two findings notes multiple internal control deficiencies over collections. For example, the official collector did not require the receipts nor corroborate their registration in Ingresos, the collectors voided receipts contrary to the regulation, and the directors of Finance did not protect nor safeguard the Municipality's fiscal valuables and documents.
In fact, the municipal officials did not find for examination five files of receipts issued nor the yellow copies of 20 manual receipts. These documents should have been filed and made available to be audited by the Office of the Comptroller of Puerto Rico.
In contravention of the current law, the Municipality granted 57 credit assignment agreements totaling $198,144 without the certification of the notary public, without charge to a purchase order and without registering them with the OCPR. In the agreements the contractor acknowledges its debt to the subcontractors, assigns the direct payment to the municipality and that it be deducted from the main contract.
In addition, the agreements lacked basic information such as the social security number, the address and evidence of invoices for the services rendered. In this regard, the director of Finance could not verify whether the credits corresponded to a legally contracted obligation.
Luquillo's budget was $7.5 million in 2019, $8 million in 2020, $8 million in 2021, $7.7 million in 2022 and $7.9 million in 2023. The financial statements reflected surpluses of $2.3 million in 2018, $1.9 million in 2019, $2.5 million in 2020, $668 thousand in 2021 and $2.9 million in 2022.
The audit recommends to the director of the Office of Management and Budget that he ensure that the Municipality of Luquillo complies with the Corrective Action Plan established by the OCPR.
This third and final Report of Luquillo covers the period from July 1, 2018 to June 30, 2023.
The Audit Report OC-26-06 can be obtained on our website: www.ocpr.gov.pr.
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