FAC Explorer

Audit 19310

FY End
2022-06-30
Total Expended
$56.26M
Findings
4
Programs
32
Organization: Autonomous Municipality of Caguas (PR)
Year: 2022 Accepted: 2023-03-30
Auditor: CPA Diaz-Martinez Psc

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
23495 2022-001 Significant Deficiency - L
23496 2022-002 Significant Deficiency - L
599937 2022-001 Significant Deficiency - L
599938 2022-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $10.28M Yes 1
14.871 Section 8 Housing Choice Vouchers $7.92M - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $5.63M - 0
93.356 Head Start Disaster Recovery $1.85M Yes 0
93.600 Head Start $1.38M Yes 0
66.458 Capitalization Grants for Clean Water State Revolving Funds $929,005 Yes 0
21.019 Coronavirus Relief Fund $850,565 Yes 0
10.558 Child and Adult Care Food Program $798,413 - 0
14.218 Community Development Block Grants/entitlement Grants $622,149 Yes 0
14.239 Home Investment Partnerships Program $555,801 - 0
11.307 Economic Adjustment Assistance $552,525 - 0
84.287 Twenty-First Century Community Learning Centers $516,942 - 0
20.507 Federal Transit_formula Grants $455,505 - 0
97.067 Homeland Security Grant Program $306,078 - 0
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $268,941 - 0
20.526 Buses and Bus Facilities Formula, Competitive, and Low Or No Emissions Programs $257,200 - 0
20.527 Public Transportation Emergency Relief Program $166,293 - 0
14.231 Emergency Solutions Grant Program $139,774 - 0
93.575 Child Care and Development Block Grant $111,956 - 0
84.002 Adult Education - Basic Grants to States $109,780 - 0
14.879 Mainstream Vouchers $75,020 - 0
93.053 Nutrition Services Incentive Program $65,299 - 0
94.006 Americorps $65,059 - 0
16.575 Crime Victim Assistance $63,605 - 0
16.835 Body Worn Camera Policy and Implementation $58,251 - 0
16.034 Coronavirus Emergency Supplemental Funding Program $39,281 - 0
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $34,475 - 0
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $24,485 - 0
93.558 Temporary Assistance for Needy Families $16,936 - 0
20.600 State and Community Highway Safety $11,530 - 0
93.671 Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services $7,697 - 0
20.616 National Priority Safety Programs $4,574 - 0

Contacts

Name Title Type
L46HH5KH8CA1 Angie Frias Auditee
7877448833 Jose E Diaz Martinez Auditor
No contacts on file

Notes to SEFA

Title: REPORTING ENTITY Accounting Policies: A.Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.B. Negative amounts, if any, shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.C. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10 percent de minimis indirect cost rate, instead a 5% or 6% of approved budget for the Head Start Program was granted for the Early Head Start-Child Care Partnership grants, for a total of indirect costs appropriated of $140,740. The amount of $140,740 expended as indirect cost was included in the expenditures reported on SEFA for the Head Start Program. The Autonomous Municipality of Caguas of the Commonwealth of Puerto Rico (Municipality) was founded in 1775 and operates as a governmental unit of the Commonwealth of Puerto Rico under the Law No. 81 of August 30, 1991, known as the Autonomous Municipalities Laws of the Commonwealth of Puerto Rico. It is governed by a Mayor and a 16-member Municipal Legislature elected for a four-year term.
Title: BASIS OF PRESENTATION Accounting Policies: A.Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.B. Negative amounts, if any, shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.C. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10 percent de minimis indirect cost rate, instead a 5% or 6% of approved budget for the Head Start Program was granted for the Early Head Start-Child Care Partnership grants, for a total of indirect costs appropriated of $140,740. The amount of $140,740 expended as indirect cost was included in the expenditures reported on SEFA for the Head Start Program. The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal award activities of the Autonomous Municipality of Caguas of the Commonwealth of Puerto Rico (Municipality) under programs of the Federal government for the fiscal year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Municipality, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Municipality.
Title: SCHEDULE NOT IN AGREEMENT WITH OTHER FEDERAL AWARD REPORTING Accounting Policies: A.Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.B. Negative amounts, if any, shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.C. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10 percent de minimis indirect cost rate, instead a 5% or 6% of approved budget for the Head Start Program was granted for the Early Head Start-Child Care Partnership grants, for a total of indirect costs appropriated of $140,740. The amount of $140,740 expended as indirect cost was included in the expenditures reported on SEFA for the Head Start Program. The information included in the Schedule may not fully agree with other Federal award reports submitted directly to federal granting agencies.
Title: ASSISTANCE LISTING NUMBER Accounting Policies: A.Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.B. Negative amounts, if any, shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.C. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10 percent de minimis indirect cost rate, instead a 5% or 6% of approved budget for the Head Start Program was granted for the Early Head Start-Child Care Partnership grants, for a total of indirect costs appropriated of $140,740. The amount of $140,740 expended as indirect cost was included in the expenditures reported on SEFA for the Head Start Program. The Assistance Listing Number, formerly known as the Catalog of Federal Domestic Assistance (CFDA) Number, is a five-digit number assigned in the awarding document for all Federal assistance award mechanisms, including Federal grants and cooperative agreements.
Title: RELATIONSHIP TO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BAL Accounting Policies: A.Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.B. Negative amounts, if any, shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.C. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10 percent de minimis indirect cost rate, instead a 5% or 6% of approved budget for the Head Start Program was granted for the Early Head Start-Child Care Partnership grants, for a total of indirect costs appropriated of $140,740. The amount of $140,740 expended as indirect cost was included in the expenditures reported on SEFA for the Head Start Program. Expenditures of federal awards are reported in the Municipalitys Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Fund as follows: General Fund - $306,078, Capital Projects Fund $2,617,849, Health and Human Services Fund $20,670,485, Social and Welfare Activities Fund $16,658,953 and Other Governmental Funds $15,940,690.The amount of $524,310 was included as expenditure in the SEFA, under the program Economic Adjustment Assistance (11.307) that are not expenditure. In accordance with program regulation, the amount of expenditure to be reported in the SEFA, should consider the principal loan balance outstanding at year end ($425,674), plus any cash balance available for loan purposes ($98,636), and finally, any administrative expenditures incurred during the fiscal year, which was $28,215.The Municipality receives FEMA reimbursement funds from the Central Recovery and Reconstruction Office of Puerto Rico (COR3). COR3 is a division of the Puerto Rico Public Private Authority created through Executive Order 2017-65 to manage all efforts for the recovery of the Commonwealth of Puerto Rico (Commonwealth) after the passage of Hurricanes Irma and Maria. COR3 was authorized by the Governor to receive all disaster recovery grants of FEMA.The Municipality received grants under the Community Development Block Grants/States Program and Non-Entitlement Grants in Hawaii CDBG-DR, from the Puerto Rico Housing Department (PRHD). In accordance with the program regulation, these funds are the matching portion for allowable costs incurred for projects approved by the PRHD, related to the Disaster Grants Public Assistance (Presidentially Declared Disasters) expenditures.

Finding Details

Finding 2022-001
FEDERAL PROGRAM (ALN 14.218) COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AWARD NUMBER B21MC72001 (Federal Award Year 2021) COMPLIANCE REQUIREMENT REPORTING TYPE OF FINDING NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY CRITERIA In accordance with 2 CFR Appendix A to Part 170, I(a), unless a recipient of grants or cooperative agreements is exempt, they are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The non-Federal entity or Federal agency must report each obligating action to http://www.fsrs.gov. For subaward information, report no later than the end of the month following the month in which the obligation was made. STATEMENT OF CONDITION As part of our audit procedures, the Municipality include information from contractors instead of subrecipient in the report submitted June 30, 2022. QUESTIONED COSTS Not Applicable PERSPECTIVE INFORMATION We received from the Municipality the report made for the month of June 30, 2022. We noted that they included all contracts from vendors, instead of Federal awards made to a subrecipient under which the total funding is anticipated to be equal or exceed $30,000 in Federal funding. The total transactions examined were five (5) contracts with vendors in the amount of $271,032. STATEMENT OF CAUSE Municipality staff had the understanding that they must include all contracts or purchase orders greater than $30,0000 in the FFATA report. POSSIBLE ASSERTED EFFECT The Municipality is in non-compliance with the requirements to report through the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) platform. This breach does not allow for the transparency that this report requires. IDENTIFICATION OF REPEAT FINDING This is not a repeated Finding. RECOMMENDATIONS We recommend that the Municipality provide training and technical assistance to the personnel that prepares and submits the contracts that meet the requirements to be reported on the FSRS portal. In addition, controls should be in place in order to be able to keep track of the type of contract they need to report.
Finding 2022-002
FEDERAL PROGRAM (ALN 21.027) CORONAVIRUS STATE AND LOCAL RECOVERY FUNDS U.S. DEPARTMENT OF TREASURY AWARD NUMBER NOT AVAILABLE COMPLIANCE REQUIREMENT REPORTING TYPE OF FINDING NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY CRITERIA Per the Compliance and Reporting Guidance ? Part I: General Guidance ? Section D: Uniform Administrative Requirements ? Section 10: Reporting: establishes that: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Recipients should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, recipients need to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. STATEMENT OF CONDITION During the performance of our audit procedures regarding reporting, we obtained copies of the reports submitted for the periods of March to December 2021, January to March 2022 and April to June 2022 for the evaluation of the reporting requirements. Due to that the reports presented accumulated information, we selected the report for the period of April to June 2022 for reporting requirement evaluation. After the evaluation of the report and its supporting documentation we noticed the following situations: 1. In one of the projects the total amount of current period and cumulative obligations does not agree with the total amounts of obligations recognized in the accounting system for the same project and period. 2. In one of the projects the total current period and cumulative expenditures does not agree with the total amounts of expenditures recognized in the accounting system for the same project and period.. QUESTIONED COSTS Not Determined. PERSPECTIVE INFORMATION Condition 1: This was an isolated case in the accounting system were the purchase order balance does not reflect the expenditures incurred. No additional information was required when preparing the report to validate the reason because the purchase order balance was the same as originally reported although expenditures were incurred during the period related to the same project. In a subsequent report the total amount of obligations will be updated. Condition 2: For the next period report the involuntary error was identified and properly corrected to reflect the correct amounts in the report in accordance with the accounting records. STATEMENT OF CAUSE Condition 1: The personnel in charge of preparing the report used a worksheet to analyze the information to include in the report and by an error of the accounting system the purchase order balance at the end of the period was the same as originally reported. When the expenditures for the period were entered in the worksheet they were considered as new obligations and not as a reduction to the original purchase order amount.Condition 2: The personnel in charge of preparing the report used a worksheet to analyze the information to include in the report and by an involuntary error entered as total expenditures the total amount of obligations for the project causing that the amount reported as expenditures be greater than the amount in the accounting system. POSSIBLE ASSERTED EFFECT The information included in the reports does not agree with the Municipality accounting records. IDENTIFICATION OF REPEAT FINDING This is not a repeated Finding. RECOMMENDATIONS We recommend that the Municipality establish an adequate procedure to verify and trace the amounts included in the report to the amounts in the accounting records of the Municipality, by using more than one type of report from the accounting system so the personnel in charge of preparing the report can trace to more than one source of information that the amounts reported are in accordance with the accounting records.
Finding 2022-001
FEDERAL PROGRAM (ALN 14.218) COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AWARD NUMBER B21MC72001 (Federal Award Year 2021) COMPLIANCE REQUIREMENT REPORTING TYPE OF FINDING NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY CRITERIA In accordance with 2 CFR Appendix A to Part 170, I(a), unless a recipient of grants or cooperative agreements is exempt, they are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The non-Federal entity or Federal agency must report each obligating action to http://www.fsrs.gov. For subaward information, report no later than the end of the month following the month in which the obligation was made. STATEMENT OF CONDITION As part of our audit procedures, the Municipality include information from contractors instead of subrecipient in the report submitted June 30, 2022. QUESTIONED COSTS Not Applicable PERSPECTIVE INFORMATION We received from the Municipality the report made for the month of June 30, 2022. We noted that they included all contracts from vendors, instead of Federal awards made to a subrecipient under which the total funding is anticipated to be equal or exceed $30,000 in Federal funding. The total transactions examined were five (5) contracts with vendors in the amount of $271,032. STATEMENT OF CAUSE Municipality staff had the understanding that they must include all contracts or purchase orders greater than $30,0000 in the FFATA report. POSSIBLE ASSERTED EFFECT The Municipality is in non-compliance with the requirements to report through the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) platform. This breach does not allow for the transparency that this report requires. IDENTIFICATION OF REPEAT FINDING This is not a repeated Finding. RECOMMENDATIONS We recommend that the Municipality provide training and technical assistance to the personnel that prepares and submits the contracts that meet the requirements to be reported on the FSRS portal. In addition, controls should be in place in order to be able to keep track of the type of contract they need to report.
Finding 2022-002
FEDERAL PROGRAM (ALN 21.027) CORONAVIRUS STATE AND LOCAL RECOVERY FUNDS U.S. DEPARTMENT OF TREASURY AWARD NUMBER NOT AVAILABLE COMPLIANCE REQUIREMENT REPORTING TYPE OF FINDING NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY CRITERIA Per the Compliance and Reporting Guidance ? Part I: General Guidance ? Section D: Uniform Administrative Requirements ? Section 10: Reporting: establishes that: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Recipients should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, recipients need to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. STATEMENT OF CONDITION During the performance of our audit procedures regarding reporting, we obtained copies of the reports submitted for the periods of March to December 2021, January to March 2022 and April to June 2022 for the evaluation of the reporting requirements. Due to that the reports presented accumulated information, we selected the report for the period of April to June 2022 for reporting requirement evaluation. After the evaluation of the report and its supporting documentation we noticed the following situations: 1. In one of the projects the total amount of current period and cumulative obligations does not agree with the total amounts of obligations recognized in the accounting system for the same project and period. 2. In one of the projects the total current period and cumulative expenditures does not agree with the total amounts of expenditures recognized in the accounting system for the same project and period.. QUESTIONED COSTS Not Determined. PERSPECTIVE INFORMATION Condition 1: This was an isolated case in the accounting system were the purchase order balance does not reflect the expenditures incurred. No additional information was required when preparing the report to validate the reason because the purchase order balance was the same as originally reported although expenditures were incurred during the period related to the same project. In a subsequent report the total amount of obligations will be updated. Condition 2: For the next period report the involuntary error was identified and properly corrected to reflect the correct amounts in the report in accordance with the accounting records. STATEMENT OF CAUSE Condition 1: The personnel in charge of preparing the report used a worksheet to analyze the information to include in the report and by an error of the accounting system the purchase order balance at the end of the period was the same as originally reported. When the expenditures for the period were entered in the worksheet they were considered as new obligations and not as a reduction to the original purchase order amount.Condition 2: The personnel in charge of preparing the report used a worksheet to analyze the information to include in the report and by an involuntary error entered as total expenditures the total amount of obligations for the project causing that the amount reported as expenditures be greater than the amount in the accounting system. POSSIBLE ASSERTED EFFECT The information included in the reports does not agree with the Municipality accounting records. IDENTIFICATION OF REPEAT FINDING This is not a repeated Finding. RECOMMENDATIONS We recommend that the Municipality establish an adequate procedure to verify and trace the amounts included in the report to the amounts in the accounting records of the Municipality, by using more than one type of report from the accounting system so the personnel in charge of preparing the report can trace to more than one source of information that the amounts reported are in accordance with the accounting records.