Condition - The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official
Municipality’s accounting system. According to an analysis of the related transactions prepared by the Municipality’s consultants for financial statements and Schedule of Expenditures of Federal Awards purposes for the fiscal year ended June 30, 2021, $1,082,613 has been expended or transferred to the general fund to cover eligible expenses under the terms allowed by the CDL grant. As a consequence of these conditions, compliance with reporting requirements established by the grantor entity, and related internal controls, could not be verified. Criteria - Code of Federal Regulations, 44 CFR Section 206, establishes, among other requirements, that the borrower must maintain complete and accurate accounts and other records for the program in accordance with the CDL requirements and regulations. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the non-Federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and
conditions of the Federal award. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. Cause - The Municipality has not properly established a formal recording system to identify and itemize the transactions that must be reported as eligible expenditures under the expense / cost category allowed by the provisions of the CDL. Also, there is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. Effect - The Municipality is exposed to the Grantor questioning the use of funds and affecting aspects and amounts associated with the qualification for the Loan Cancellation, if eligible at the end of the term to request this cancellation. Recommendation - We recommended management to prepare the necessary analyses, according to the requirements of the CDL, to identify and detail the expenditures that have been charged against the CDL funds. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
Condition - The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. According to an analysis of the related transactions prepared by the Municipality’s consultants for financial statements and Schedule of Expenditures of Federal Awards purposes for the fiscal year ended June 30, 2021, $907,650 has been expended under the terms allowed by the Disaster Grants. As a consequence of these conditions, compliance with reporting requirements established by the grantor entity, and related internal controls, could not be verified. Criteria - Code of Federal Regulations, 44 CFR Section 206, establishes, among other requirements, that the borrower must maintain complete and accurate accounts and other records for the program in accordance with the Disaster Grants requirements and regulations. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the non-Federal entity’s financial
management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and
conditions of the Federal award. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue,
costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. Cause - The Municipality has not properly established a formal recording system to identify and itemize the transactions that must be reported as eligible expenditures under the expense / cost category allowed by the provisions of the Disaster Grant. Also, there is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. Effect - The program is exposed to not being in compliance with the Reporting Requirements as established in agreement. Also, the Municipality is exposed to the Grantor questioning the use of funds. Recommendation - We recommended management to prepare the necessary analyses, according to the requirements of the Grant, to identify and detail the expenditures that have been charged against the grant allowable expenditures. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
Condition - The Single Audit Report for the fiscal year ended June 30, 2021 was not issued and submitted to the Federal Audit Clearinghouse within nine (9) months after the end of the audit period. Although, a waivers were approved by the OMB delaying the due date, the Data Collection Form and the reporting package were not submitted on a timely basis. Criteria - Uniform Guidance, Section 500.512, states that the audit must be completed, and the data collection form and reporting package must be submitted within of earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. The Single Audit Reporting Package, as defined and required in 2 CFR 200 for fiscal year ended June 30, 2021, could not be submitted in a timely manner because of the effects of the COVID-19 pandemic. As further discussed in the Municipality’s Notes to the Basic Financial Statements included in its audited financial statements for the same year, the Municipality’s activities were affected by the Executive Orders issued by the Governor of Puerto Rico, and subsequently a waiver was granted by the OMB through the issuance of Memorandum M-21-20 until September 30, 2022, for period ending June 30, 2021. On September 18, 2022, Puerto Rico was declared a major disaster area under the Stafford Act. Consistent with this declaration and the complications created by Hurricane Fiona, OMB has granted a six-month extension for all single audits that cover recipients in Puerto Rico and have due dates between September 18, 2022 and December 31, 2022. Cause - The Municipality did not comply with the stablished regulation as prescribed in OMB Uniform Guidance and due to the lockdown as a result of COVID-19 pandemic, the Municipality did not have the necessary resources to prepare and submit the reporting package on time. Effect - The Municipality could be sanctioned by Federal Government or Agencies due to the noncompliance with the Single Audit requirements. Recommendation - Procedures should be implemented to ensure that the Municipality complies with the established Federal Regulation, as prescribed by OMB Super Circular Uniform Guidance.
Condition - The Single Audit Report for the fiscal year ended June 30, 2021 was not issued and submitted to the Federal Audit Clearinghouse within nine (9) months after the end of the audit period. Although, a waivers were approved by the OMB delaying the due date, the Data Collection Form and the reporting package were not submitted on a timely basis. Criteria - Uniform Guidance, Section 500.512, states that the audit must be completed, and the data collection form and reporting package must be submitted within of earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. The Single Audit Reporting Package, as defined and required in 2 CFR 200 for fiscal year ended June 30, 2021, could not be submitted in a timely manner because of the effects of the COVID-19 pandemic. As further discussed in the Municipality’s Notes to the Basic Financial Statements included in its audited financial statements for the same year, the Municipality’s activities were affected by the Executive Orders issued by the Governor of Puerto Rico, and subsequently a waiver was granted by the OMB through the issuance of Memorandum M-21-20 until September 30, 2022, for period ending June 30, 2021. On September 18, 2022, Puerto Rico was declared a major disaster area under the Stafford Act. Consistent with this declaration and the complications created by Hurricane Fiona, OMB has granted a six-month extension for all single audits that cover recipients in Puerto Rico and have due dates between September 18, 2022 and December 31, 2022. Cause - The Municipality did not comply with the stablished regulation as prescribed in OMB Uniform Guidance and due to the lockdown as a result of COVID-19 pandemic, the Municipality did not have the necessary resources to prepare and submit the reporting package on time. Effect - The Municipality could be sanctioned by Federal Government or Agencies due to the noncompliance with the Single Audit requirements. Recommendation - Procedures should be implemented to ensure that the Municipality complies with the established Federal Regulation, as prescribed by OMB Super Circular Uniform Guidance.
Condition - The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official
Municipality’s accounting system. According to an analysis of the related transactions prepared by the Municipality’s consultants for financial statements and Schedule of Expenditures of Federal Awards purposes for the fiscal year ended June 30, 2021, $1,082,613 has been expended or transferred to the general fund to cover eligible expenses under the terms allowed by the CDL grant. As a consequence of these conditions, compliance with reporting requirements established by the grantor entity, and related internal controls, could not be verified. Criteria - Code of Federal Regulations, 44 CFR Section 206, establishes, among other requirements, that the borrower must maintain complete and accurate accounts and other records for the program in accordance with the CDL requirements and regulations. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the non-Federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and
conditions of the Federal award. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. Cause - The Municipality has not properly established a formal recording system to identify and itemize the transactions that must be reported as eligible expenditures under the expense / cost category allowed by the provisions of the CDL. Also, there is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. Effect - The Municipality is exposed to the Grantor questioning the use of funds and affecting aspects and amounts associated with the qualification for the Loan Cancellation, if eligible at the end of the term to request this cancellation. Recommendation - We recommended management to prepare the necessary analyses, according to the requirements of the CDL, to identify and detail the expenditures that have been charged against the CDL funds. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
Condition - The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. According to an analysis of the related transactions prepared by the Municipality’s consultants for financial statements and Schedule of Expenditures of Federal Awards purposes for the fiscal year ended June 30, 2021, $907,650 has been expended under the terms allowed by the Disaster Grants. As a consequence of these conditions, compliance with reporting requirements established by the grantor entity, and related internal controls, could not be verified. Criteria - Code of Federal Regulations, 44 CFR Section 206, establishes, among other requirements, that the borrower must maintain complete and accurate accounts and other records for the program in accordance with the Disaster Grants requirements and regulations. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the non-Federal entity’s financial
management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and
conditions of the Federal award. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue,
costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. Cause - The Municipality has not properly established a formal recording system to identify and itemize the transactions that must be reported as eligible expenditures under the expense / cost category allowed by the provisions of the Disaster Grant. Also, there is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. Effect - The program is exposed to not being in compliance with the Reporting Requirements as established in agreement. Also, the Municipality is exposed to the Grantor questioning the use of funds. Recommendation - We recommended management to prepare the necessary analyses, according to the requirements of the Grant, to identify and detail the expenditures that have been charged against the grant allowable expenditures. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
Condition - The Single Audit Report for the fiscal year ended June 30, 2021 was not issued and submitted to the Federal Audit Clearinghouse within nine (9) months after the end of the audit period. Although, a waivers were approved by the OMB delaying the due date, the Data Collection Form and the reporting package were not submitted on a timely basis. Criteria - Uniform Guidance, Section 500.512, states that the audit must be completed, and the data collection form and reporting package must be submitted within of earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. The Single Audit Reporting Package, as defined and required in 2 CFR 200 for fiscal year ended June 30, 2021, could not be submitted in a timely manner because of the effects of the COVID-19 pandemic. As further discussed in the Municipality’s Notes to the Basic Financial Statements included in its audited financial statements for the same year, the Municipality’s activities were affected by the Executive Orders issued by the Governor of Puerto Rico, and subsequently a waiver was granted by the OMB through the issuance of Memorandum M-21-20 until September 30, 2022, for period ending June 30, 2021. On September 18, 2022, Puerto Rico was declared a major disaster area under the Stafford Act. Consistent with this declaration and the complications created by Hurricane Fiona, OMB has granted a six-month extension for all single audits that cover recipients in Puerto Rico and have due dates between September 18, 2022 and December 31, 2022. Cause - The Municipality did not comply with the stablished regulation as prescribed in OMB Uniform Guidance and due to the lockdown as a result of COVID-19 pandemic, the Municipality did not have the necessary resources to prepare and submit the reporting package on time. Effect - The Municipality could be sanctioned by Federal Government or Agencies due to the noncompliance with the Single Audit requirements. Recommendation - Procedures should be implemented to ensure that the Municipality complies with the established Federal Regulation, as prescribed by OMB Super Circular Uniform Guidance.
Condition - The Single Audit Report for the fiscal year ended June 30, 2021 was not issued and submitted to the Federal Audit Clearinghouse within nine (9) months after the end of the audit period. Although, a waivers were approved by the OMB delaying the due date, the Data Collection Form and the reporting package were not submitted on a timely basis. Criteria - Uniform Guidance, Section 500.512, states that the audit must be completed, and the data collection form and reporting package must be submitted within of earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. The Single Audit Reporting Package, as defined and required in 2 CFR 200 for fiscal year ended June 30, 2021, could not be submitted in a timely manner because of the effects of the COVID-19 pandemic. As further discussed in the Municipality’s Notes to the Basic Financial Statements included in its audited financial statements for the same year, the Municipality’s activities were affected by the Executive Orders issued by the Governor of Puerto Rico, and subsequently a waiver was granted by the OMB through the issuance of Memorandum M-21-20 until September 30, 2022, for period ending June 30, 2021. On September 18, 2022, Puerto Rico was declared a major disaster area under the Stafford Act. Consistent with this declaration and the complications created by Hurricane Fiona, OMB has granted a six-month extension for all single audits that cover recipients in Puerto Rico and have due dates between September 18, 2022 and December 31, 2022. Cause - The Municipality did not comply with the stablished regulation as prescribed in OMB Uniform Guidance and due to the lockdown as a result of COVID-19 pandemic, the Municipality did not have the necessary resources to prepare and submit the reporting package on time. Effect - The Municipality could be sanctioned by Federal Government or Agencies due to the noncompliance with the Single Audit requirements. Recommendation - Procedures should be implemented to ensure that the Municipality complies with the established Federal Regulation, as prescribed by OMB Super Circular Uniform Guidance.