FAC Explorer

Audit 29891

FY End
2022-06-30
Total Expended
$17.79M
Findings
6
Programs
14
Organization: Municipality of San Sebastian (PR)
Year: 2022 Accepted: 2022-12-28
Auditor: Ortiz Rivera Rivera & CO LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
29166 2022-002 Significant Deficiency - I
29167 2022-003 Significant Deficiency - L
29168 2022-003 Significant Deficiency - L
605608 2022-002 Significant Deficiency - I
605609 2022-003 Significant Deficiency - L
605610 2022-003 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $3.57M - 0
93.356 Head Start Disaster Recovery $2.30M Yes 1
14.218 Community Development Block Grants/entitlement Grants $1.11M - 0
14.871 Section 8 Housing Choice Vouchers $851,890 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $768,257 Yes 1
93.575 Child Care and Development Block Grant $375,395 - 0
97.030 Community Disaster Loans $322,259 - 0
10.558 Child and Adult Care Food Program $175,282 - 0
21.019 Coronavirus Relief Fund $108,675 - 0
93.600 Head Start $79,884 Yes 0
16.738 Edward Byrne Memorial Justice Assistance Grant Program $71,974 - 0
10.433 Rural Housing Preservation Grants $68,942 - 0
20.507 Federal Transit_formula Grants $26,674 - 0
93.569 Community Services Block Grant $10,580 - 0

Contacts

Name Title Type
LSNFEMGDKJE1 Eric Castro Auditee
7878962300 CPA Marco Rivera Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures arerecognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are notallowable or are limited as to reimbursement.The Assistance Listing Number is a program identification number. The first two digits identify the federal department oragency that administers the program, and the last three numbers are assigned by numerical sequence.State or local government redistributions of federal awards to the Municipality, known as passthrough awards, should betreated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requiresthe schedule to include the name of the passthrough entity and the identifying number assigned by the pass-through entityfor the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified asN/AV are not available. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. COMMUNITY DISASTER LOANS (97.030) - Balances outstanding at the end of the audit period were 4278133. As reported in Note 14 to the financial statements, the Municipality had an outstanding federal loan balance as ofJune 30, 2022. The loan is a Community Disaster Loans (CDL) awarded by the Federal Emergency Management Agency(FEMA) in the amount of $4,278,133. The note bears interest at 2.625% annually. The purpose of the note is to provideoperational funding to the Municipality to continue operating aster substantial revenue losses caused by Hurricane Maria.The terms of the loan provide that if the Municipality has not recovered sufficiently to meet its operating budget after three fullfiscal years, repayment of all or part of the loan may be cancelled. The principal balance on June 30, 2022, was $4,278,133,the full amount of the loan.
Title: Relationships to Federal Financial Reports Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures arerecognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are notallowable or are limited as to reimbursement.The Assistance Listing Number is a program identification number. The first two digits identify the federal department oragency that administers the program, and the last three numbers are assigned by numerical sequence.State or local government redistributions of federal awards to the Municipality, known as passthrough awards, should betreated by the Municipality as though they were received directly from the federal government. The Uniform Guidance requiresthe schedule to include the name of the passthrough entity and the identifying number assigned by the pass-through entityfor the federal awards received as a sub recipient. Numbers identified as N/A are not applicable and numbers identified asN/AV are not available. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Expenditures of federal awards are reported in the Municipalitys Statement of Revenues, Expenditures and Changes in FundBalances Governmental Fund as follows: Head Start Fund - $7,211,116, American Rescue Plan Act, (ARPA) Fund$1,774,176 and Other Governmental Funds $8,804,433.

Finding Details

Finding 2022-002
Assistance Listing 21.027 Coronavirus State and Local Fiscal Recovery Funds Finding: 2022-002 Federal Agency: U. S Department of Treasury Pass Through Agency: Puerto Rico Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Noncompliance and Significant Deficiency Responsible Official: Eric Castro, Finance Director Condition During our audits test of the procurement and suspension and debarment compliance requirements, we noted that the Municipality did not include the applicable clauses in one the contract as required by 2 CRF section 200.327. Criteria In accordance with applicable procurement and suspension and debarment requirements that they must also ensure that every contract includes the applicable contract clauses required by the 2 CFR section 200.327. Cause The Municipality did not include the required clauses in the contract. Effect The Municipality is in noncompliance with the applicable procurement and suspension and debarment requirements. Recommendation Responsible procurements personnel should enforce compliance with applicable procurement requirements and included the required and applicable clauses. Questioned Costs None
Finding 2022-003
Finding: 2022-003 Federal Agency: U. S Department of Health and Human Service Pass Through Agency: Commonwealth of Puerto Rico ? Administration for Children and Families Federal Program Title: Head Start Disaster Recovery and Early Head Start Assistance Listing Number: 93.356 & 93.600 Compliance Requirement: Reporting Type of Finding: Noncompliance and Significant Deficiency Responsible Official: Eric Castro, Finance Director Condition The Municipality did not submit on time the monthly report from October 2021 to February 2022 required by the Administration for Children and Families. Criteria The contract with the Administration for Children and Families establish that they had to submit monthly reports thirtyfive days at the end of the month. Cause Internal controls procedures have not been enforced to ensure that the monthly reports were submitted on time. Effect The Municipality is in noncompliance with the grant agreement requirements establish. Recommendation All reports should be submitted as specified in the grant agreements. The directors and accounting personnel should ensure to submit the reports in accordance with the dates establish in the grant agreement. Questioned Costs None
Finding 2022-003
Finding: 2022-003 Federal Agency: U. S Department of Health and Human Service Pass Through Agency: Commonwealth of Puerto Rico ? Administration for Children and Families Federal Program Title: Head Start Disaster Recovery and Early Head Start Assistance Listing Number: 93.356 & 93.600 Compliance Requirement: Reporting Type of Finding: Noncompliance and Significant Deficiency Responsible Official: Eric Castro, Finance Director Condition The Municipality did not submit on time the monthly report from October 2021 to February 2022 required by the Administration for Children and Families. Criteria The contract with the Administration for Children and Families establish that they had to submit monthly reports thirtyfive days at the end of the month. Cause Internal controls procedures have not been enforced to ensure that the monthly reports were submitted on time. Effect The Municipality is in noncompliance with the grant agreement requirements establish. Recommendation All reports should be submitted as specified in the grant agreements. The directors and accounting personnel should ensure to submit the reports in accordance with the dates establish in the grant agreement. Questioned Costs None
Finding 2022-002
Assistance Listing 21.027 Coronavirus State and Local Fiscal Recovery Funds Finding: 2022-002 Federal Agency: U. S Department of Treasury Pass Through Agency: Puerto Rico Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Noncompliance and Significant Deficiency Responsible Official: Eric Castro, Finance Director Condition During our audits test of the procurement and suspension and debarment compliance requirements, we noted that the Municipality did not include the applicable clauses in one the contract as required by 2 CRF section 200.327. Criteria In accordance with applicable procurement and suspension and debarment requirements that they must also ensure that every contract includes the applicable contract clauses required by the 2 CFR section 200.327. Cause The Municipality did not include the required clauses in the contract. Effect The Municipality is in noncompliance with the applicable procurement and suspension and debarment requirements. Recommendation Responsible procurements personnel should enforce compliance with applicable procurement requirements and included the required and applicable clauses. Questioned Costs None
Finding 2022-003
Finding: 2022-003 Federal Agency: U. S Department of Health and Human Service Pass Through Agency: Commonwealth of Puerto Rico ? Administration for Children and Families Federal Program Title: Head Start Disaster Recovery and Early Head Start Assistance Listing Number: 93.356 & 93.600 Compliance Requirement: Reporting Type of Finding: Noncompliance and Significant Deficiency Responsible Official: Eric Castro, Finance Director Condition The Municipality did not submit on time the monthly report from October 2021 to February 2022 required by the Administration for Children and Families. Criteria The contract with the Administration for Children and Families establish that they had to submit monthly reports thirtyfive days at the end of the month. Cause Internal controls procedures have not been enforced to ensure that the monthly reports were submitted on time. Effect The Municipality is in noncompliance with the grant agreement requirements establish. Recommendation All reports should be submitted as specified in the grant agreements. The directors and accounting personnel should ensure to submit the reports in accordance with the dates establish in the grant agreement. Questioned Costs None
Finding 2022-003
Finding: 2022-003 Federal Agency: U. S Department of Health and Human Service Pass Through Agency: Commonwealth of Puerto Rico ? Administration for Children and Families Federal Program Title: Head Start Disaster Recovery and Early Head Start Assistance Listing Number: 93.356 & 93.600 Compliance Requirement: Reporting Type of Finding: Noncompliance and Significant Deficiency Responsible Official: Eric Castro, Finance Director Condition The Municipality did not submit on time the monthly report from October 2021 to February 2022 required by the Administration for Children and Families. Criteria The contract with the Administration for Children and Families establish that they had to submit monthly reports thirtyfive days at the end of the month. Cause Internal controls procedures have not been enforced to ensure that the monthly reports were submitted on time. Effect The Municipality is in noncompliance with the grant agreement requirements establish. Recommendation All reports should be submitted as specified in the grant agreements. The directors and accounting personnel should ensure to submit the reports in accordance with the dates establish in the grant agreement. Questioned Costs None