Toa Alta Municipal Government at fault on cemetery and bus station projects
By Caribbean Business on January 3, 2016
SAN JUAN – The city of Toa Alta received $10 million in federal loans about eight years ago, to build a cemetery and bus station that were never built. Local authorities claim to have no documentation about the projects because copies of the paperwork are being held by contractors.
The contractors say they’re not cooperating because they were stiffed on the payments and are having disputes with the city, according to a report from the Office of the Inspector General featured in the Daily Caller.
In 2007, the Department of Housing and Urban Development gave the Municipality of Toa Alta $2 million in community development grants to build a mausoleum. The money was required to be spent by 2010. Construction has not started, because of “problems accessing the project site,” which is on land that had long been by the local government itself.
Another $6 million-plus was for construction of a four-story building containing parking spaces and a bus terminal, also distributed in 2007 and to be spent by 2010, and with no changes permitted. But when authorities checked the site in 2015, they found an abandoned frame of a five-story building on the site. Puerto Rico is demanding more federal money to complete the expanded project.
The report also found that part of the money was used for operational expenditures of the city.
The federal money was supposed to be a loan, but HUD secured no collateral before disbursing the funds, leaving the department with little leverage to prevent an entity from walking away with the money, according to a report.
“The records maintained did not properly account for program income, accounts receivable, and capital assets,” the IG audit found. “The municipality did not maintain a general ledger for the Section 108 program. The accounting record maintained was a check register that contained incorrect balances and transactions that were not recorded.”
HUD’s Section 108 program sends money to local governments for projects for the needy but governments often use it to build general amenities, saying that low-income people benefit from having them nearby. Toa Alta spent some of the money on completely unrelated purposes and it is unclear where most of the money went. Local officials also failed to abide by “environmental requirements” on the bus-stop’s building frame.
The findings occur as Puerto Rico is trying to deal with a financial crisis brought about by a $72 billion debt.