Finding Reference 2023-002
Federal Agency: U.S. Department of the Treasury
Pass-through
Agency: Puerto Rico Fiscal Agency and Financial Advisory Authority
Program: Coronavirus State and Local Fiscal Recovery Funds
(Assistance Listing No. 21.027)
Compliance
Requirement: Reporting – Special Reporting (L)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance
(NC)
Statement of
Condition During the fiscal year, the Municipality administered funds from the Coronavirus
State and Local Fiscal Recovery Funds, this allocation was granted directly from the
Federal government and through Puerto Rico Fiscal Agency and Financial Advisory
Authority, respectively. In our Reporting Test, we evaluated three monthly reports
submitted to the Puerto Rico Fiscal Agency and Financial Advisory Authority. We
found that the Municipality submitted two of the three reports late. Also, we evaluated
the annual Project and Expenditure Report submitted to the U.S. Department of
Treasury. We found that the Municipality reported as current expenditures expenses
that were reported incurred in the report from the prior period.
Criteria The Municipal Strengthening Fund Transfer Agreement, Clause 5.1, states that the
Transferee shall submit reports as the Transferor determines are needed to verify use
of the funds and compliance with conditions that are imposed on the Transfer, and
such reports shall be in such form, with such content, as specified by the Transferor
in the Transfer Plan and future program instructions directed to all Recipients.
The Transfer Plan, on Exhibit A, establishes that starting on the 15th day of the month
following receipt of the funds, and by the 15th day of each month, the Transferee will
submit a Use of Funds Report for the prior month’s expenses.
Also, on the Municipal Strengthening Fund Program Guidelines, the Puerto Rico
Fiscal Agency and Financial Advisory Authority specified on the Reporting
Requirements Section that the recipients are required to submit monthly financial
reports using the reporting template provided by the program.
In addition to the contract agreement with the Puerto Rico Fiscal Agency and
Financial Advisory Authority, the Municipality had an agreement with the U.S.
Department of Treasury to receive funds direct funds as a Non-entitlement and
County Unit. We determined that the Municipality submitted the required annual
report in time.
The Coronavirus State and Local Fiscal Recovery Funds - Compliance and
Reporting Guidance, Part I, Section 10 (d), states 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.
Appropriate accounting records must be maintained for compiling and reporting
accurate, compliant financial data, in accordance with appropriate accounting
standards and principles.
In addition, where appropriate, controls need to be established to ensure the
completion and timely submission of all mandatory performance and/or compliance
reporting.
Cause of Condition There is a lack of knowledge and training for the personnel assigned. Additionally,
the Municipality does not have adequate monitoring for the activity and the reports.
Effect of Condition The program is not in compliance with the Reporting Requirements as established in
the contract agreement and guidelines.
Recommendation We recommend training for the authorized personnel who administer the program,
to better understand the reporting requirements and develop complete and accurate
reports. The Municipality should establish a monitoring system to ensure compliance
with requirements established by the pass-through agency such as: (1) submitting the
reports during the 15th day of each month, where the fund expenses of the previous
month will be reported as incurred. Also, the Municipality should establish a process
to validate that the amounts reported agree with the accounting records of the
corresponding period reported. This will ensure better control of the program.
Questioned Cost None.
Prior Year Finding This finding is similar to prior year finding 2022-003.
Views of Responsible Officials and Planned Corrective Action We concur with the finding. The Municipality of Cataño (Federal Programs
Office), as a corrective action, will use the calendar tool for notifications and
reminders for the established dates so that we can submit compliance reports for
ARPA Funds on time.
Implementation Date: Fiscal year 2023-2024
Responsible Person: Carlos Flores Rivera, Federal Program Subdirector
Finding Reference 2023-002
Federal Agency: U.S. Department of the Treasury
Pass-through
Agency: Puerto Rico Fiscal Agency and Financial Advisory Authority
Program: Coronavirus State and Local Fiscal Recovery Funds
(Assistance Listing No. 21.027)
Compliance
Requirement: Reporting – Special Reporting (L)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance
(NC)
Statement of
Condition During the fiscal year, the Municipality administered funds from the Coronavirus
State and Local Fiscal Recovery Funds, this allocation was granted directly from the
Federal government and through Puerto Rico Fiscal Agency and Financial Advisory
Authority, respectively. In our Reporting Test, we evaluated three monthly reports
submitted to the Puerto Rico Fiscal Agency and Financial Advisory Authority. We
found that the Municipality submitted two of the three reports late. Also, we evaluated
the annual Project and Expenditure Report submitted to the U.S. Department of
Treasury. We found that the Municipality reported as current expenditures expenses
that were reported incurred in the report from the prior period.
Criteria The Municipal Strengthening Fund Transfer Agreement, Clause 5.1, states that the
Transferee shall submit reports as the Transferor determines are needed to verify use
of the funds and compliance with conditions that are imposed on the Transfer, and
such reports shall be in such form, with such content, as specified by the Transferor
in the Transfer Plan and future program instructions directed to all Recipients.
The Transfer Plan, on Exhibit A, establishes that starting on the 15th day of the month
following receipt of the funds, and by the 15th day of each month, the Transferee will
submit a Use of Funds Report for the prior month’s expenses.
Also, on the Municipal Strengthening Fund Program Guidelines, the Puerto Rico
Fiscal Agency and Financial Advisory Authority specified on the Reporting
Requirements Section that the recipients are required to submit monthly financial
reports using the reporting template provided by the program.
In addition to the contract agreement with the Puerto Rico Fiscal Agency and
Financial Advisory Authority, the Municipality had an agreement with the U.S.
Department of Treasury to receive funds direct funds as a Non-entitlement and
County Unit. We determined that the Municipality submitted the required annual
report in time.
The Coronavirus State and Local Fiscal Recovery Funds - Compliance and
Reporting Guidance, Part I, Section 10 (d), states 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.
Appropriate accounting records must be maintained for compiling and reporting
accurate, compliant financial data, in accordance with appropriate accounting
standards and principles.
In addition, where appropriate, controls need to be established to ensure the
completion and timely submission of all mandatory performance and/or compliance
reporting.
Cause of Condition There is a lack of knowledge and training for the personnel assigned. Additionally,
the Municipality does not have adequate monitoring for the activity and the reports.
Effect of Condition The program is not in compliance with the Reporting Requirements as established in
the contract agreement and guidelines.
Recommendation We recommend training for the authorized personnel who administer the program,
to better understand the reporting requirements and develop complete and accurate
reports. The Municipality should establish a monitoring system to ensure compliance
with requirements established by the pass-through agency such as: (1) submitting the
reports during the 15th day of each month, where the fund expenses of the previous
month will be reported as incurred. Also, the Municipality should establish a process
to validate that the amounts reported agree with the accounting records of the
corresponding period reported. This will ensure better control of the program.
Questioned Cost None.
Prior Year Finding This finding is similar to prior year finding 2022-003.
Views of Responsible Officials and Planned Corrective Action We concur with the finding. The Municipality of Cataño (Federal Programs
Office), as a corrective action, will use the calendar tool for notifications and
reminders for the established dates so that we can submit compliance reports for
ARPA Funds on time.
Implementation Date: Fiscal year 2023-2024
Responsible Person: Carlos Flores Rivera, Federal Program Subdirector
Finding Reference 2023-003
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Puerto Rico Department of Family
Program: Child Care and Development Block Grant (Assistance Listing No. 93.575)
Compliance Requirement: Reporting (L)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC)
Statement of Condition During our audit procedures, we found that the Program did not submit all the annual
closing reports or were submitted late to the pass-through entity, as required by the
contract agreement.
Criteria 45 CFR Part 98.67 (c) Fiscal control and accounting procedures shall be sufficient
to permit: (1) Preparation of reports required by the Secretary under this subpart and
under subpart H; and (2) The tracing of funds to a level of expenditure adequate to
establish that such funds have not been used in violation of the provisions of this
part.
Also, the contract agreement states in Clause eleven (11) that the Municipality is
responsible for the presentation of the trial balance and annual partial closing report
fifteen (15) calendar days after the end of the contract. Ninety (90) days after, the
Municipality should liquidate all obligations and present to the pass-through entity
the final annual closing report (CC-006).
Cause of Condition The Program does not have effective internal controls to ensure that the required
documentation and reports are submitted to the pass-through agency in the requested
time frame. There was a change in the personnel in charge of the fiscal area of the
program. Therefore, reports have been submitted late or haven’t been submitted yet.
Effect of Condition The Program is not in compliance with 45 CFR Part 98.67- Fiscal Requirements (c)
(1) (2).
Recommendation We recommend training for the authorized personnel who administer the program,
to better understand the reporting requirements and develop complete and accurate
reports. The Municipality should establish a monitoring system to ensure compliance
with requirements established by the pass-through agency. This will ensure better
control of the program.
Questioned Cost None.
Prior Year Finding No.
Views of Responsible Officials and Planned Corrective Action We concur with the finding. In the month of January 2024, the Municipality of
Cataño submitted a Letter to the ACUDEN Agency requesting additional time to be
able to submit a closure report. This request is due to the fact that said agency has
not disbursed the approved funds to the Program, to be able to carry out the
breakdown of expenses and corresponding payments. To date we have not received
a response to this request.
The Municipality of Cataño (Federal Programs Office) undertakes to follow up
with the relevant agency in future occasions to receive a response when an extension
is requested for a compliance report.
Implementation Date: Fiscal year 2023-2024
Responsible Person: Mrs. Yolanda Maldonado Oliver, Federal Programs Director
Finding Reference 2023-004
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Puerto Rico Department of Family
Program: Child Care and Development Block Grant (Assistance Listing No. 93.575)
Compliance Requirement: Earmarking (G)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC)
Statement of Condition In our Earmarking Test, we found that the Program did not comply with the quality
earmark limitation that requires the program to spend at least nine percent (9%) of
the funds on quality activities and at least an additional three percent (3%) on quality
improvement for infants and toddlers on the program. Also, we found that the
Program did not comply with the direct spending earmark limitation that requires the
program to spend not less than seventy percent (70%) to fund direct services.
Criteria 45 CFR, Subpart F, Section 98.50 (b) (1) states that of the aggregate amount of funds
expended by a State or Territory, no less than seven percent in fiscal years 2016 and
2017, eight percent in fiscal years 2018 and 2019, and nine percent in fiscal year
2020 and each succeeding fiscal year shall be used for activities designed to improve
the quality of child care services and increase parental options for, and access to,
high-quality child care as described at 45 CFR Subpart F, Section 98.53. Section
98.50 (b) (2) states that no less than three percent in fiscal year 2017 and each
succeeding fiscal year shall be used to carry out activities as such activities relate to
the quality of care for infants and toddlers. Also, section 98.50 (b) (3) states that
nothing in this section shall preclude the State or Territory from reserving a larger
percentage of funds to carry out activities described in paragraphs (b) (1) and (2) of
Section 98.50.
45 CFR, Subpart F, Section 95.50 (d) states of the aggregate amount of funds
expended, no more than five percent may be used for administrative activities as
described in 45 CFR 98.54.
45 CFR, Subpart F, Section 95.50 (f) (2) states that from Discretionary amounts
provided for a fiscal year, the Lead Agency shall use not less than 70 percent to fund
direct services (provided by the Lead Agency).
Cause of Condition The program’s budget, approved by the pass-through entity, was not distributed
according to the cost limitations required for the administrative, quality and direct
costs. Therefore, the amounts spent per category of expenditure did not meet the
minimum amounts.
Effect of Condition The program is not in compliance with 45 CFR, Subpart F, Section 98.50.
Recommendation We recommend the Program’s Management to request to the pass-through entity a
revision of the approved budgeted amounts in order to make all the required
adjustments to comply with the program cost limitations.
Questioned Cost None.
Prior Year Finding No.
Views of Responsible Officials and Planned Corrective Action We do not concur with the finding. This finding is not applicable because what is
stated about the description in the approved budget is not stipulated by the
Municipality of Cataño, which is the one being audited. This description is
designated from ACUDEN.
Implementation date: Fiscal year 2023-2024
Responsible official: Mrs. Lymara Salgado, Child Care Program Director
Finding Reference 2023-002
Federal Agency: U.S. Department of the Treasury
Pass-through
Agency: Puerto Rico Fiscal Agency and Financial Advisory Authority
Program: Coronavirus State and Local Fiscal Recovery Funds
(Assistance Listing No. 21.027)
Compliance
Requirement: Reporting – Special Reporting (L)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance
(NC)
Statement of
Condition During the fiscal year, the Municipality administered funds from the Coronavirus
State and Local Fiscal Recovery Funds, this allocation was granted directly from the
Federal government and through Puerto Rico Fiscal Agency and Financial Advisory
Authority, respectively. In our Reporting Test, we evaluated three monthly reports
submitted to the Puerto Rico Fiscal Agency and Financial Advisory Authority. We
found that the Municipality submitted two of the three reports late. Also, we evaluated
the annual Project and Expenditure Report submitted to the U.S. Department of
Treasury. We found that the Municipality reported as current expenditures expenses
that were reported incurred in the report from the prior period.
Criteria The Municipal Strengthening Fund Transfer Agreement, Clause 5.1, states that the
Transferee shall submit reports as the Transferor determines are needed to verify use
of the funds and compliance with conditions that are imposed on the Transfer, and
such reports shall be in such form, with such content, as specified by the Transferor
in the Transfer Plan and future program instructions directed to all Recipients.
The Transfer Plan, on Exhibit A, establishes that starting on the 15th day of the month
following receipt of the funds, and by the 15th day of each month, the Transferee will
submit a Use of Funds Report for the prior month’s expenses.
Also, on the Municipal Strengthening Fund Program Guidelines, the Puerto Rico
Fiscal Agency and Financial Advisory Authority specified on the Reporting
Requirements Section that the recipients are required to submit monthly financial
reports using the reporting template provided by the program.
In addition to the contract agreement with the Puerto Rico Fiscal Agency and
Financial Advisory Authority, the Municipality had an agreement with the U.S.
Department of Treasury to receive funds direct funds as a Non-entitlement and
County Unit. We determined that the Municipality submitted the required annual
report in time.
The Coronavirus State and Local Fiscal Recovery Funds - Compliance and
Reporting Guidance, Part I, Section 10 (d), states 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.
Appropriate accounting records must be maintained for compiling and reporting
accurate, compliant financial data, in accordance with appropriate accounting
standards and principles.
In addition, where appropriate, controls need to be established to ensure the
completion and timely submission of all mandatory performance and/or compliance
reporting.
Cause of Condition There is a lack of knowledge and training for the personnel assigned. Additionally,
the Municipality does not have adequate monitoring for the activity and the reports.
Effect of Condition The program is not in compliance with the Reporting Requirements as established in
the contract agreement and guidelines.
Recommendation We recommend training for the authorized personnel who administer the program,
to better understand the reporting requirements and develop complete and accurate
reports. The Municipality should establish a monitoring system to ensure compliance
with requirements established by the pass-through agency such as: (1) submitting the
reports during the 15th day of each month, where the fund expenses of the previous
month will be reported as incurred. Also, the Municipality should establish a process
to validate that the amounts reported agree with the accounting records of the
corresponding period reported. This will ensure better control of the program.
Questioned Cost None.
Prior Year Finding This finding is similar to prior year finding 2022-003.
Views of Responsible Officials and Planned Corrective Action We concur with the finding. The Municipality of Cataño (Federal Programs
Office), as a corrective action, will use the calendar tool for notifications and
reminders for the established dates so that we can submit compliance reports for
ARPA Funds on time.
Implementation Date: Fiscal year 2023-2024
Responsible Person: Carlos Flores Rivera, Federal Program Subdirector
Finding Reference 2023-002
Federal Agency: U.S. Department of the Treasury
Pass-through
Agency: Puerto Rico Fiscal Agency and Financial Advisory Authority
Program: Coronavirus State and Local Fiscal Recovery Funds
(Assistance Listing No. 21.027)
Compliance
Requirement: Reporting – Special Reporting (L)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance
(NC)
Statement of
Condition During the fiscal year, the Municipality administered funds from the Coronavirus
State and Local Fiscal Recovery Funds, this allocation was granted directly from the
Federal government and through Puerto Rico Fiscal Agency and Financial Advisory
Authority, respectively. In our Reporting Test, we evaluated three monthly reports
submitted to the Puerto Rico Fiscal Agency and Financial Advisory Authority. We
found that the Municipality submitted two of the three reports late. Also, we evaluated
the annual Project and Expenditure Report submitted to the U.S. Department of
Treasury. We found that the Municipality reported as current expenditures expenses
that were reported incurred in the report from the prior period.
Criteria The Municipal Strengthening Fund Transfer Agreement, Clause 5.1, states that the
Transferee shall submit reports as the Transferor determines are needed to verify use
of the funds and compliance with conditions that are imposed on the Transfer, and
such reports shall be in such form, with such content, as specified by the Transferor
in the Transfer Plan and future program instructions directed to all Recipients.
The Transfer Plan, on Exhibit A, establishes that starting on the 15th day of the month
following receipt of the funds, and by the 15th day of each month, the Transferee will
submit a Use of Funds Report for the prior month’s expenses.
Also, on the Municipal Strengthening Fund Program Guidelines, the Puerto Rico
Fiscal Agency and Financial Advisory Authority specified on the Reporting
Requirements Section that the recipients are required to submit monthly financial
reports using the reporting template provided by the program.
In addition to the contract agreement with the Puerto Rico Fiscal Agency and
Financial Advisory Authority, the Municipality had an agreement with the U.S.
Department of Treasury to receive funds direct funds as a Non-entitlement and
County Unit. We determined that the Municipality submitted the required annual
report in time.
The Coronavirus State and Local Fiscal Recovery Funds - Compliance and
Reporting Guidance, Part I, Section 10 (d), states 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.
Appropriate accounting records must be maintained for compiling and reporting
accurate, compliant financial data, in accordance with appropriate accounting
standards and principles.
In addition, where appropriate, controls need to be established to ensure the
completion and timely submission of all mandatory performance and/or compliance
reporting.
Cause of Condition There is a lack of knowledge and training for the personnel assigned. Additionally,
the Municipality does not have adequate monitoring for the activity and the reports.
Effect of Condition The program is not in compliance with the Reporting Requirements as established in
the contract agreement and guidelines.
Recommendation We recommend training for the authorized personnel who administer the program,
to better understand the reporting requirements and develop complete and accurate
reports. The Municipality should establish a monitoring system to ensure compliance
with requirements established by the pass-through agency such as: (1) submitting the
reports during the 15th day of each month, where the fund expenses of the previous
month will be reported as incurred. Also, the Municipality should establish a process
to validate that the amounts reported agree with the accounting records of the
corresponding period reported. This will ensure better control of the program.
Questioned Cost None.
Prior Year Finding This finding is similar to prior year finding 2022-003.
Views of Responsible Officials and Planned Corrective Action We concur with the finding. The Municipality of Cataño (Federal Programs
Office), as a corrective action, will use the calendar tool for notifications and
reminders for the established dates so that we can submit compliance reports for
ARPA Funds on time.
Implementation Date: Fiscal year 2023-2024
Responsible Person: Carlos Flores Rivera, Federal Program Subdirector
Finding Reference 2023-003
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Puerto Rico Department of Family
Program: Child Care and Development Block Grant (Assistance Listing No. 93.575)
Compliance Requirement: Reporting (L)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC)
Statement of Condition During our audit procedures, we found that the Program did not submit all the annual
closing reports or were submitted late to the pass-through entity, as required by the
contract agreement.
Criteria 45 CFR Part 98.67 (c) Fiscal control and accounting procedures shall be sufficient
to permit: (1) Preparation of reports required by the Secretary under this subpart and
under subpart H; and (2) The tracing of funds to a level of expenditure adequate to
establish that such funds have not been used in violation of the provisions of this
part.
Also, the contract agreement states in Clause eleven (11) that the Municipality is
responsible for the presentation of the trial balance and annual partial closing report
fifteen (15) calendar days after the end of the contract. Ninety (90) days after, the
Municipality should liquidate all obligations and present to the pass-through entity
the final annual closing report (CC-006).
Cause of Condition The Program does not have effective internal controls to ensure that the required
documentation and reports are submitted to the pass-through agency in the requested
time frame. There was a change in the personnel in charge of the fiscal area of the
program. Therefore, reports have been submitted late or haven’t been submitted yet.
Effect of Condition The Program is not in compliance with 45 CFR Part 98.67- Fiscal Requirements (c)
(1) (2).
Recommendation We recommend training for the authorized personnel who administer the program,
to better understand the reporting requirements and develop complete and accurate
reports. The Municipality should establish a monitoring system to ensure compliance
with requirements established by the pass-through agency. This will ensure better
control of the program.
Questioned Cost None.
Prior Year Finding No.
Views of Responsible Officials and Planned Corrective Action We concur with the finding. In the month of January 2024, the Municipality of
Cataño submitted a Letter to the ACUDEN Agency requesting additional time to be
able to submit a closure report. This request is due to the fact that said agency has
not disbursed the approved funds to the Program, to be able to carry out the
breakdown of expenses and corresponding payments. To date we have not received
a response to this request.
The Municipality of Cataño (Federal Programs Office) undertakes to follow up
with the relevant agency in future occasions to receive a response when an extension
is requested for a compliance report.
Implementation Date: Fiscal year 2023-2024
Responsible Person: Mrs. Yolanda Maldonado Oliver, Federal Programs Director
Finding Reference 2023-004
Federal Agency: U.S. Department of Health and Human Services
Pass-through Agency: Puerto Rico Department of Family
Program: Child Care and Development Block Grant (Assistance Listing No. 93.575)
Compliance Requirement: Earmarking (G)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC)
Statement of Condition In our Earmarking Test, we found that the Program did not comply with the quality
earmark limitation that requires the program to spend at least nine percent (9%) of
the funds on quality activities and at least an additional three percent (3%) on quality
improvement for infants and toddlers on the program. Also, we found that the
Program did not comply with the direct spending earmark limitation that requires the
program to spend not less than seventy percent (70%) to fund direct services.
Criteria 45 CFR, Subpart F, Section 98.50 (b) (1) states that of the aggregate amount of funds
expended by a State or Territory, no less than seven percent in fiscal years 2016 and
2017, eight percent in fiscal years 2018 and 2019, and nine percent in fiscal year
2020 and each succeeding fiscal year shall be used for activities designed to improve
the quality of child care services and increase parental options for, and access to,
high-quality child care as described at 45 CFR Subpart F, Section 98.53. Section
98.50 (b) (2) states that no less than three percent in fiscal year 2017 and each
succeeding fiscal year shall be used to carry out activities as such activities relate to
the quality of care for infants and toddlers. Also, section 98.50 (b) (3) states that
nothing in this section shall preclude the State or Territory from reserving a larger
percentage of funds to carry out activities described in paragraphs (b) (1) and (2) of
Section 98.50.
45 CFR, Subpart F, Section 95.50 (d) states of the aggregate amount of funds
expended, no more than five percent may be used for administrative activities as
described in 45 CFR 98.54.
45 CFR, Subpart F, Section 95.50 (f) (2) states that from Discretionary amounts
provided for a fiscal year, the Lead Agency shall use not less than 70 percent to fund
direct services (provided by the Lead Agency).
Cause of Condition The program’s budget, approved by the pass-through entity, was not distributed
according to the cost limitations required for the administrative, quality and direct
costs. Therefore, the amounts spent per category of expenditure did not meet the
minimum amounts.
Effect of Condition The program is not in compliance with 45 CFR, Subpart F, Section 98.50.
Recommendation We recommend the Program’s Management to request to the pass-through entity a
revision of the approved budgeted amounts in order to make all the required
adjustments to comply with the program cost limitations.
Questioned Cost None.
Prior Year Finding No.
Views of Responsible Officials and Planned Corrective Action We do not concur with the finding. This finding is not applicable because what is
stated about the description in the approved budget is not stipulated by the
Municipality of Cataño, which is the one being audited. This description is
designated from ACUDEN.
Implementation date: Fiscal year 2023-2024
Responsible official: Mrs. Lymara Salgado, Child Care Program Director