Finding Reference 2023-003
Federal Agency U.S. Department of Housing and Urban Development
Pass-Through Agency P.R. Department of Housing
Federal Program Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii
Requirement Equipment and Real Property Management (F)
Type of Finding Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition Section II – Financial Statements Findings – Finding Reference 2022-002.
Criteria CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided.
Cause of Condition Section II – Financial Statements Findings – Finding Reference 2023-002.
Effect of Condition We could not identify the property acquired with CDBG funds to realize the proper evaluation as required.
Recommendation Section II – Financial Statements Findings – Finding Reference 2023-002.
Questioned Costs None
Prior Year Finding This finding is similar to prior year finding 2021-003 and 2022-003.
Views of Responsible Officials and Planned Corrective Action As expressed in the corrective action related to Finding 2023-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness.
Implementation Date: During the Fiscal Year 2023-2024
Responsible Person: Mrs. Miraisa David Esparra
Finance Department Director
Finding Reference 2023-003
Federal Agency U.S. Department of Housing and Urban Development
Pass-Through Agency P.R. Department of Housing
Federal Program Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii
Requirement Equipment and Real Property Management (F)
Type of Finding Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition Section II – Financial Statements Findings – Finding Reference 2022-002.
Criteria CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided.
Cause of Condition Section II – Financial Statements Findings – Finding Reference 2023-002.
Effect of Condition We could not identify the property acquired with CDBG funds to realize the proper evaluation as required.
Recommendation Section II – Financial Statements Findings – Finding Reference 2023-002.
Questioned Costs None
Prior Year Finding This finding is similar to prior year finding 2021-003 and 2022-003.
Views of Responsible Officials and Planned Corrective Action As expressed in the corrective action related to Finding 2023-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness.
Implementation Date: During the Fiscal Year 2023-2024
Responsible Person: Mrs. Miraisa David Esparra
Finance Department Director
Finding Reference 2023-003
Federal Agency U.S. Department of Housing and Urban Development
Pass-Through Agency P.R. Department of Housing
Federal Program Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii
Requirement Equipment and Real Property Management (F)
Type of Finding Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition Section II – Financial Statements Findings – Finding Reference 2022-002.
Criteria CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided.
Cause of Condition Section II – Financial Statements Findings – Finding Reference 2023-002.
Effect of Condition We could not identify the property acquired with CDBG funds to realize the proper evaluation as required.
Recommendation Section II – Financial Statements Findings – Finding Reference 2023-002.
Questioned Costs None
Prior Year Finding This finding is similar to prior year finding 2021-003 and 2022-003.
Views of Responsible Officials and Planned Corrective Action As expressed in the corrective action related to Finding 2023-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness.
Implementation Date: During the Fiscal Year 2023-2024
Responsible Person: Mrs. Miraisa David Esparra
Finance Department Director
Finding Reference 2023-004
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Reporting – Performance Reporting (L)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition In our reporting test, we found that the Municipality did not submit the reports corresponding to audit year in the required time frame:
• The first quarter (July-September 2022) and the second quarter (October-December 2022) were submitted on March 3, 2023.
• The third quarter (January-March 2023) was submitted to May 24, 2023.
• The fourth quarter (April-June 2023) was submitted to August 31, 2023.
Criteria Based on the CDBG agreements, the Municipality must submit to the Department of Housing reports on records, collections, and disbursements of Program Income on an annual and quarterly basis. Including the progress of the projects developed with the CDBG program. In addition, the Municipality will submit all the reports required by the Agency. Failure to comply with this provision will be just cause for the Department to stop the fund requisition process.
§ 200.332 Requirements for pass-through entities. (1) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award. (2) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports.
Additionally, in OCAM Memorandum Circular 2002-15 of July 17, 2002, it is established that quarterly reports must be submitted within the following 40 days after the expiration date of the quarter.
Cause of Condition The personal in charge of the program did not comply with the deadlines for the quarterly reports. Additionally, the program does not have adequate monitoring of the activity and the reports, which were delivered late.
Effect of Condition The program is not in compliance with the Reporting Requirements.
Recommendation We recommend that the Municipality maintain constant monitoring and updating to achieve better control of the program. The reports must be presented as established in the agreement and guidelines of the Department of Housing. This will ensure compliance with reporting requirements under the Community Development Block Grants/State’s Program and Non-entitlement Grant in Hawaii agreement.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The Program Director is aware about the compliance requirement. We gave instructions to the Program Director to maintain a dateline control sheet to ascertain that required reports were submitted within the due date.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-004
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Reporting – Performance Reporting (L)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition In our reporting test, we found that the Municipality did not submit the reports corresponding to audit year in the required time frame:
• The first quarter (July-September 2022) and the second quarter (October-December 2022) were submitted on March 3, 2023.
• The third quarter (January-March 2023) was submitted to May 24, 2023.
• The fourth quarter (April-June 2023) was submitted to August 31, 2023.
Criteria Based on the CDBG agreements, the Municipality must submit to the Department of Housing reports on records, collections, and disbursements of Program Income on an annual and quarterly basis. Including the progress of the projects developed with the CDBG program. In addition, the Municipality will submit all the reports required by the Agency. Failure to comply with this provision will be just cause for the Department to stop the fund requisition process.
§ 200.332 Requirements for pass-through entities. (1) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award. (2) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports.
Additionally, in OCAM Memorandum Circular 2002-15 of July 17, 2002, it is established that quarterly reports must be submitted within the following 40 days after the expiration date of the quarter.
Cause of Condition The personal in charge of the program did not comply with the deadlines for the quarterly reports. Additionally, the program does not have adequate monitoring of the activity and the reports, which were delivered late.
Effect of Condition The program is not in compliance with the Reporting Requirements.
Recommendation We recommend that the Municipality maintain constant monitoring and updating to achieve better control of the program. The reports must be presented as established in the agreement and guidelines of the Department of Housing. This will ensure compliance with reporting requirements under the Community Development Block Grants/State’s Program and Non-entitlement Grant in Hawaii agreement.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The Program Director is aware about the compliance requirement. We gave instructions to the Program Director to maintain a dateline control sheet to ascertain that required reports were submitted within the due date.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-004
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Reporting – Performance Reporting (L)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition In our reporting test, we found that the Municipality did not submit the reports corresponding to audit year in the required time frame:
• The first quarter (July-September 2022) and the second quarter (October-December 2022) were submitted on March 3, 2023.
• The third quarter (January-March 2023) was submitted to May 24, 2023.
• The fourth quarter (April-June 2023) was submitted to August 31, 2023.
Criteria Based on the CDBG agreements, the Municipality must submit to the Department of Housing reports on records, collections, and disbursements of Program Income on an annual and quarterly basis. Including the progress of the projects developed with the CDBG program. In addition, the Municipality will submit all the reports required by the Agency. Failure to comply with this provision will be just cause for the Department to stop the fund requisition process.
§ 200.332 Requirements for pass-through entities. (1) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award. (2) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports.
Additionally, in OCAM Memorandum Circular 2002-15 of July 17, 2002, it is established that quarterly reports must be submitted within the following 40 days after the expiration date of the quarter.
Cause of Condition The personal in charge of the program did not comply with the deadlines for the quarterly reports. Additionally, the program does not have adequate monitoring of the activity and the reports, which were delivered late.
Effect of Condition The program is not in compliance with the Reporting Requirements.
Recommendation We recommend that the Municipality maintain constant monitoring and updating to achieve better control of the program. The reports must be presented as established in the agreement and guidelines of the Department of Housing. This will ensure compliance with reporting requirements under the Community Development Block Grants/State’s Program and Non-entitlement Grant in Hawaii agreement.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The Program Director is aware about the compliance requirement. We gave instructions to the Program Director to maintain a dateline control sheet to ascertain that required reports were submitted within the due date.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-005
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housekeepers activity (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition We examined four files of housekeeper program participants and found the following exceptions:
a) In four (4) participant’s files, we noted that the results of the evaluation for the application (Form DV-CV-AH-004-A or DV-CV-AH-004-B) that establishes that the service to be offered by the CDBG Program is approved or denied was not completed and sent to participants.
b) In four (4) participant’s files, although we did find evidence that visits were performed during the contract period, the Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide.
Criteria 24 CFR, Section 570.484 states that the Municipality must assure that the program funds benefit very low, low – and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program’s requirements for housekeeper activities.
Cause of Condition The Municipality’s controls and procedures failed to assure that the participant’s files include all the required documents to comply with the Program requirements.
Effect of Condition The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide.
Recommendation We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-005
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housekeepers activity (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition We examined four files of housekeeper program participants and found the following exceptions:
a) In four (4) participant’s files, we noted that the results of the evaluation for the application (Form DV-CV-AH-004-A or DV-CV-AH-004-B) that establishes that the service to be offered by the CDBG Program is approved or denied was not completed and sent to participants.
b) In four (4) participant’s files, although we did find evidence that visits were performed during the contract period, the Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide.
Criteria 24 CFR, Section 570.484 states that the Municipality must assure that the program funds benefit very low, low – and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program’s requirements for housekeeper activities.
Cause of Condition The Municipality’s controls and procedures failed to assure that the participant’s files include all the required documents to comply with the Program requirements.
Effect of Condition The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide.
Recommendation We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-005
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housekeepers activity (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition We examined four files of housekeeper program participants and found the following exceptions:
a) In four (4) participant’s files, we noted that the results of the evaluation for the application (Form DV-CV-AH-004-A or DV-CV-AH-004-B) that establishes that the service to be offered by the CDBG Program is approved or denied was not completed and sent to participants.
b) In four (4) participant’s files, although we did find evidence that visits were performed during the contract period, the Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide.
Criteria 24 CFR, Section 570.484 states that the Municipality must assure that the program funds benefit very low, low – and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program’s requirements for housekeeper activities.
Cause of Condition The Municipality’s controls and procedures failed to assure that the participant’s files include all the required documents to comply with the Program requirements.
Effect of Condition The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide.
Recommendation We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-006
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housing Rehabilitation Test (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition During our examination of two (2) participant’s files, we found the following situations:
a) The participant exceeded the time limit required by the Program to complete the repairs. (One (1) case)
b) The rehabilitation was still in process during our audit (agreement expired on April 20, 2023). (One (1) case)
Criteria 24 CFR, Section 570.506 states that when CDBG funds are used for rehabilitation, the grantee must assure that the work is properly completed, and appropriate documentation is maintained.
Cause of Condition The program has not established adequate internal control procedures to assure that rehabilitations are duly completed as required by regulations and appropriate documentation is maintained.
Effect of Condition The Municipality is not in compliance with 24 CFR, Section 570.506.
Recommendation We recommend that Program to assure that the participant completes the repairs and rehabilitation process within the period established in the contract.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The participant mentioned in the finding is an exceptional case; a very low-income older adult participant who has limitations to complete your housing unit repairs. But we gave instructions to the Program Director to identify alternatives to provide assistance to the participant in order to complete the housing repairs.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-006
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housing Rehabilitation Test (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition During our examination of two (2) participant’s files, we found the following situations:
a) The participant exceeded the time limit required by the Program to complete the repairs. (One (1) case)
b) The rehabilitation was still in process during our audit (agreement expired on April 20, 2023). (One (1) case)
Criteria 24 CFR, Section 570.506 states that when CDBG funds are used for rehabilitation, the grantee must assure that the work is properly completed, and appropriate documentation is maintained.
Cause of Condition The program has not established adequate internal control procedures to assure that rehabilitations are duly completed as required by regulations and appropriate documentation is maintained.
Effect of Condition The Municipality is not in compliance with 24 CFR, Section 570.506.
Recommendation We recommend that Program to assure that the participant completes the repairs and rehabilitation process within the period established in the contract.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The participant mentioned in the finding is an exceptional case; a very low-income older adult participant who has limitations to complete your housing unit repairs. But we gave instructions to the Program Director to identify alternatives to provide assistance to the participant in order to complete the housing repairs.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-006
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housing Rehabilitation Test (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition During our examination of two (2) participant’s files, we found the following situations:
a) The participant exceeded the time limit required by the Program to complete the repairs. (One (1) case)
b) The rehabilitation was still in process during our audit (agreement expired on April 20, 2023). (One (1) case)
Criteria 24 CFR, Section 570.506 states that when CDBG funds are used for rehabilitation, the grantee must assure that the work is properly completed, and appropriate documentation is maintained.
Cause of Condition The program has not established adequate internal control procedures to assure that rehabilitations are duly completed as required by regulations and appropriate documentation is maintained.
Effect of Condition The Municipality is not in compliance with 24 CFR, Section 570.506.
Recommendation We recommend that Program to assure that the participant completes the repairs and rehabilitation process within the period established in the contract.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The participant mentioned in the finding is an exceptional case; a very low-income older adult participant who has limitations to complete your housing unit repairs. But we gave instructions to the Program Director to identify alternatives to provide assistance to the participant in order to complete the housing repairs.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-003
Federal Agency U.S. Department of Housing and Urban Development
Pass-Through Agency P.R. Department of Housing
Federal Program Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii
Requirement Equipment and Real Property Management (F)
Type of Finding Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition Section II – Financial Statements Findings – Finding Reference 2022-002.
Criteria CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided.
Cause of Condition Section II – Financial Statements Findings – Finding Reference 2023-002.
Effect of Condition We could not identify the property acquired with CDBG funds to realize the proper evaluation as required.
Recommendation Section II – Financial Statements Findings – Finding Reference 2023-002.
Questioned Costs None
Prior Year Finding This finding is similar to prior year finding 2021-003 and 2022-003.
Views of Responsible Officials and Planned Corrective Action As expressed in the corrective action related to Finding 2023-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness.
Implementation Date: During the Fiscal Year 2023-2024
Responsible Person: Mrs. Miraisa David Esparra
Finance Department Director
Finding Reference 2023-003
Federal Agency U.S. Department of Housing and Urban Development
Pass-Through Agency P.R. Department of Housing
Federal Program Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii
Requirement Equipment and Real Property Management (F)
Type of Finding Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition Section II – Financial Statements Findings – Finding Reference 2022-002.
Criteria CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided.
Cause of Condition Section II – Financial Statements Findings – Finding Reference 2023-002.
Effect of Condition We could not identify the property acquired with CDBG funds to realize the proper evaluation as required.
Recommendation Section II – Financial Statements Findings – Finding Reference 2023-002.
Questioned Costs None
Prior Year Finding This finding is similar to prior year finding 2021-003 and 2022-003.
Views of Responsible Officials and Planned Corrective Action As expressed in the corrective action related to Finding 2023-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness.
Implementation Date: During the Fiscal Year 2023-2024
Responsible Person: Mrs. Miraisa David Esparra
Finance Department Director
Finding Reference 2023-003
Federal Agency U.S. Department of Housing and Urban Development
Pass-Through Agency P.R. Department of Housing
Federal Program Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii
Requirement Equipment and Real Property Management (F)
Type of Finding Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition Section II – Financial Statements Findings – Finding Reference 2022-002.
Criteria CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided.
Cause of Condition Section II – Financial Statements Findings – Finding Reference 2023-002.
Effect of Condition We could not identify the property acquired with CDBG funds to realize the proper evaluation as required.
Recommendation Section II – Financial Statements Findings – Finding Reference 2023-002.
Questioned Costs None
Prior Year Finding This finding is similar to prior year finding 2021-003 and 2022-003.
Views of Responsible Officials and Planned Corrective Action As expressed in the corrective action related to Finding 2023-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness.
Implementation Date: During the Fiscal Year 2023-2024
Responsible Person: Mrs. Miraisa David Esparra
Finance Department Director
Finding Reference 2023-004
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Reporting – Performance Reporting (L)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition In our reporting test, we found that the Municipality did not submit the reports corresponding to audit year in the required time frame:
• The first quarter (July-September 2022) and the second quarter (October-December 2022) were submitted on March 3, 2023.
• The third quarter (January-March 2023) was submitted to May 24, 2023.
• The fourth quarter (April-June 2023) was submitted to August 31, 2023.
Criteria Based on the CDBG agreements, the Municipality must submit to the Department of Housing reports on records, collections, and disbursements of Program Income on an annual and quarterly basis. Including the progress of the projects developed with the CDBG program. In addition, the Municipality will submit all the reports required by the Agency. Failure to comply with this provision will be just cause for the Department to stop the fund requisition process.
§ 200.332 Requirements for pass-through entities. (1) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award. (2) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports.
Additionally, in OCAM Memorandum Circular 2002-15 of July 17, 2002, it is established that quarterly reports must be submitted within the following 40 days after the expiration date of the quarter.
Cause of Condition The personal in charge of the program did not comply with the deadlines for the quarterly reports. Additionally, the program does not have adequate monitoring of the activity and the reports, which were delivered late.
Effect of Condition The program is not in compliance with the Reporting Requirements.
Recommendation We recommend that the Municipality maintain constant monitoring and updating to achieve better control of the program. The reports must be presented as established in the agreement and guidelines of the Department of Housing. This will ensure compliance with reporting requirements under the Community Development Block Grants/State’s Program and Non-entitlement Grant in Hawaii agreement.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The Program Director is aware about the compliance requirement. We gave instructions to the Program Director to maintain a dateline control sheet to ascertain that required reports were submitted within the due date.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-004
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Reporting – Performance Reporting (L)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition In our reporting test, we found that the Municipality did not submit the reports corresponding to audit year in the required time frame:
• The first quarter (July-September 2022) and the second quarter (October-December 2022) were submitted on March 3, 2023.
• The third quarter (January-March 2023) was submitted to May 24, 2023.
• The fourth quarter (April-June 2023) was submitted to August 31, 2023.
Criteria Based on the CDBG agreements, the Municipality must submit to the Department of Housing reports on records, collections, and disbursements of Program Income on an annual and quarterly basis. Including the progress of the projects developed with the CDBG program. In addition, the Municipality will submit all the reports required by the Agency. Failure to comply with this provision will be just cause for the Department to stop the fund requisition process.
§ 200.332 Requirements for pass-through entities. (1) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award. (2) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports.
Additionally, in OCAM Memorandum Circular 2002-15 of July 17, 2002, it is established that quarterly reports must be submitted within the following 40 days after the expiration date of the quarter.
Cause of Condition The personal in charge of the program did not comply with the deadlines for the quarterly reports. Additionally, the program does not have adequate monitoring of the activity and the reports, which were delivered late.
Effect of Condition The program is not in compliance with the Reporting Requirements.
Recommendation We recommend that the Municipality maintain constant monitoring and updating to achieve better control of the program. The reports must be presented as established in the agreement and guidelines of the Department of Housing. This will ensure compliance with reporting requirements under the Community Development Block Grants/State’s Program and Non-entitlement Grant in Hawaii agreement.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The Program Director is aware about the compliance requirement. We gave instructions to the Program Director to maintain a dateline control sheet to ascertain that required reports were submitted within the due date.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-004
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Reporting – Performance Reporting (L)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition In our reporting test, we found that the Municipality did not submit the reports corresponding to audit year in the required time frame:
• The first quarter (July-September 2022) and the second quarter (October-December 2022) were submitted on March 3, 2023.
• The third quarter (January-March 2023) was submitted to May 24, 2023.
• The fourth quarter (April-June 2023) was submitted to August 31, 2023.
Criteria Based on the CDBG agreements, the Municipality must submit to the Department of Housing reports on records, collections, and disbursements of Program Income on an annual and quarterly basis. Including the progress of the projects developed with the CDBG program. In addition, the Municipality will submit all the reports required by the Agency. Failure to comply with this provision will be just cause for the Department to stop the fund requisition process.
§ 200.332 Requirements for pass-through entities. (1) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award. (2) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports.
Additionally, in OCAM Memorandum Circular 2002-15 of July 17, 2002, it is established that quarterly reports must be submitted within the following 40 days after the expiration date of the quarter.
Cause of Condition The personal in charge of the program did not comply with the deadlines for the quarterly reports. Additionally, the program does not have adequate monitoring of the activity and the reports, which were delivered late.
Effect of Condition The program is not in compliance with the Reporting Requirements.
Recommendation We recommend that the Municipality maintain constant monitoring and updating to achieve better control of the program. The reports must be presented as established in the agreement and guidelines of the Department of Housing. This will ensure compliance with reporting requirements under the Community Development Block Grants/State’s Program and Non-entitlement Grant in Hawaii agreement.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The Program Director is aware about the compliance requirement. We gave instructions to the Program Director to maintain a dateline control sheet to ascertain that required reports were submitted within the due date.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-005
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housekeepers activity (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition We examined four files of housekeeper program participants and found the following exceptions:
a) In four (4) participant’s files, we noted that the results of the evaluation for the application (Form DV-CV-AH-004-A or DV-CV-AH-004-B) that establishes that the service to be offered by the CDBG Program is approved or denied was not completed and sent to participants.
b) In four (4) participant’s files, although we did find evidence that visits were performed during the contract period, the Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide.
Criteria 24 CFR, Section 570.484 states that the Municipality must assure that the program funds benefit very low, low – and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program’s requirements for housekeeper activities.
Cause of Condition The Municipality’s controls and procedures failed to assure that the participant’s files include all the required documents to comply with the Program requirements.
Effect of Condition The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide.
Recommendation We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-005
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housekeepers activity (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition We examined four files of housekeeper program participants and found the following exceptions:
a) In four (4) participant’s files, we noted that the results of the evaluation for the application (Form DV-CV-AH-004-A or DV-CV-AH-004-B) that establishes that the service to be offered by the CDBG Program is approved or denied was not completed and sent to participants.
b) In four (4) participant’s files, although we did find evidence that visits were performed during the contract period, the Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide.
Criteria 24 CFR, Section 570.484 states that the Municipality must assure that the program funds benefit very low, low – and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program’s requirements for housekeeper activities.
Cause of Condition The Municipality’s controls and procedures failed to assure that the participant’s files include all the required documents to comply with the Program requirements.
Effect of Condition The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide.
Recommendation We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-005
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housekeepers activity (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition We examined four files of housekeeper program participants and found the following exceptions:
a) In four (4) participant’s files, we noted that the results of the evaluation for the application (Form DV-CV-AH-004-A or DV-CV-AH-004-B) that establishes that the service to be offered by the CDBG Program is approved or denied was not completed and sent to participants.
b) In four (4) participant’s files, although we did find evidence that visits were performed during the contract period, the Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide.
Criteria 24 CFR, Section 570.484 states that the Municipality must assure that the program funds benefit very low, low – and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program’s requirements for housekeeper activities.
Cause of Condition The Municipality’s controls and procedures failed to assure that the participant’s files include all the required documents to comply with the Program requirements.
Effect of Condition The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide.
Recommendation We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-006
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housing Rehabilitation Test (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition During our examination of two (2) participant’s files, we found the following situations:
a) The participant exceeded the time limit required by the Program to complete the repairs. (One (1) case)
b) The rehabilitation was still in process during our audit (agreement expired on April 20, 2023). (One (1) case)
Criteria 24 CFR, Section 570.506 states that when CDBG funds are used for rehabilitation, the grantee must assure that the work is properly completed, and appropriate documentation is maintained.
Cause of Condition The program has not established adequate internal control procedures to assure that rehabilitations are duly completed as required by regulations and appropriate documentation is maintained.
Effect of Condition The Municipality is not in compliance with 24 CFR, Section 570.506.
Recommendation We recommend that Program to assure that the participant completes the repairs and rehabilitation process within the period established in the contract.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The participant mentioned in the finding is an exceptional case; a very low-income older adult participant who has limitations to complete your housing unit repairs. But we gave instructions to the Program Director to identify alternatives to provide assistance to the participant in order to complete the housing repairs.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-006
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housing Rehabilitation Test (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition During our examination of two (2) participant’s files, we found the following situations:
a) The participant exceeded the time limit required by the Program to complete the repairs. (One (1) case)
b) The rehabilitation was still in process during our audit (agreement expired on April 20, 2023). (One (1) case)
Criteria 24 CFR, Section 570.506 states that when CDBG funds are used for rehabilitation, the grantee must assure that the work is properly completed, and appropriate documentation is maintained.
Cause of Condition The program has not established adequate internal control procedures to assure that rehabilitations are duly completed as required by regulations and appropriate documentation is maintained.
Effect of Condition The Municipality is not in compliance with 24 CFR, Section 570.506.
Recommendation We recommend that Program to assure that the participant completes the repairs and rehabilitation process within the period established in the contract.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The participant mentioned in the finding is an exceptional case; a very low-income older adult participant who has limitations to complete your housing unit repairs. But we gave instructions to the Program Director to identify alternatives to provide assistance to the participant in order to complete the housing repairs.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director
Finding Reference 2023-006
Federal Agency: U.S. Department of Housing and Urban Development
Pass-Through Agency: P.R. Department of Housing
Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228)
Compliance Requirement: Activities Allowed – Housing Rehabilitation Test (A)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of Condition During our examination of two (2) participant’s files, we found the following situations:
a) The participant exceeded the time limit required by the Program to complete the repairs. (One (1) case)
b) The rehabilitation was still in process during our audit (agreement expired on April 20, 2023). (One (1) case)
Criteria 24 CFR, Section 570.506 states that when CDBG funds are used for rehabilitation, the grantee must assure that the work is properly completed, and appropriate documentation is maintained.
Cause of Condition The program has not established adequate internal control procedures to assure that rehabilitations are duly completed as required by regulations and appropriate documentation is maintained.
Effect of Condition The Municipality is not in compliance with 24 CFR, Section 570.506.
Recommendation We recommend that Program to assure that the participant completes the repairs and rehabilitation process within the period established in the contract.
Questioned Cost None
Prior Year Finding No
Views of Responsible Officials and Planned Corrective Action The participant mentioned in the finding is an exceptional case; a very low-income older adult participant who has limitations to complete your housing unit repairs. But we gave instructions to the Program Director to identify alternatives to provide assistance to the participant in order to complete the housing repairs.
Implementation Date: March 21, 2024
Responsible Person: Mr. Hector R. Sanjurjo Rodríguez
Federal Programs Director