FAC Explorer

Audit 303439

FY End
2023-06-30
Total Expended
$4.29M
Findings
4
Programs
9
Organization: Municipality of Maunabo (PR)
Year: 2023 Accepted: 2024-04-12
Auditor: Torres Fred & CO Psc

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
393155 2023-005 Material Weakness - L
393156 2023-006 Material Weakness - F
969597 2023-005 Material Weakness - L
969598 2023-006 Material Weakness - F

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $908,115 Yes 0
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $740,072 Yes 2
21.019 Coronavirus Relief Fund $700,990 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $624,741 - 0
93.575 Child Care and Development Block Grant $380,020 - 0
84.287 Twenty-First Century Community Learning Centers $111,767 - 0
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $76,848 - 0
93.569 Community Services Block Grant $69,384 - 0
10.558 Child and Adult Care Food Program $20,060 - 0

Contacts

Name Title Type
VPHMEMJ352N3 Maria Ortiz Auditee
7878610825 Frankie Torres Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: 1. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. 2. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. 3.Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. 4.State or local government redistributions of federal awards to the Municipality, known as “pass-through awards”, should be treated by the Municipality as though they were received directly from the Federal government. The Uniform Guidance requires the Schedule to include the name of the pass-through entity and the identifying number assigned by the pass-through entity for the Federal awards received as a sub-recipient. Numbers identified as N/AV are not available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the Federal grant activity of the Municipality of Maunabo, Puerto Rico (Municipality) under programs of the federal government for the fiscal year ended June 30, 2023. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this Schedule may differ from amounts presented in or used in the preparation of the basic financial statements. The reporting entity is defined in Note 1 (B) to the basic financial statements.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: 1. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. 2. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. 3.Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. 4.State or local government redistributions of federal awards to the Municipality, known as “pass-through awards”, should be treated by the Municipality as though they were received directly from the Federal government. The Uniform Guidance requires the Schedule to include the name of the pass-through entity and the identifying number assigned by the pass-through entity for the Federal awards received as a sub-recipient. Numbers identified as N/AV are not available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. 1.       The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. 2. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. 3.Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. 4.State or local government redistributions of federal awards to the Municipality, known as “pass-through awards”, should be treated by the Municipality as though they were received directly from the Federal government. The Uniform Guidance requires the Schedule to include the name of the pass-through entity and the identifying number assigned by the pass-through entity for the Federal awards received as a sub-recipient. Numbers identified as N/AV are not available.
Title: ASSISTANCE LISTING NUMBER Accounting Policies: 1. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. 2. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. 3.Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. 4.State or local government redistributions of federal awards to the Municipality, known as “pass-through awards”, should be treated by the Municipality as though they were received directly from the Federal government. The Uniform Guidance requires the Schedule to include the name of the pass-through entity and the identifying number assigned by the pass-through entity for the Federal awards received as a sub-recipient. Numbers identified as N/AV are not available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Assistance Listing Number (ALN), formerly known as the Catalog of Federal Domestic Assistance (CFDA) Number, is a five-digit number assigned in the awarding document for all federal assistance award mechanisms, including federal grants and cooperative agreements. Assistance listings are detailed public descriptions of federal programs that provide grants, loans, scholarships, insurance, and other types of assistance awards. The Sam.gov assistance listing is the publicly available online database showing all available Federally-funded programs.
Title: INDIRECT COSTS Accounting Policies: 1. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. 2. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. 3.Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. 4.State or local government redistributions of federal awards to the Municipality, known as “pass-through awards”, should be treated by the Municipality as though they were received directly from the Federal government. The Uniform Guidance requires the Schedule to include the name of the pass-through entity and the identifying number assigned by the pass-through entity for the Federal awards received as a sub-recipient. Numbers identified as N/AV are not available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
Title: MAJOR PROGRAMS Accounting Policies: 1. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. 2. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. 3.Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. 4.State or local government redistributions of federal awards to the Municipality, known as “pass-through awards”, should be treated by the Municipality as though they were received directly from the Federal government. The Uniform Guidance requires the Schedule to include the name of the pass-through entity and the identifying number assigned by the pass-through entity for the Federal awards received as a sub-recipient. Numbers identified as N/AV are not available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. Major programs are identified in the Summary of Auditor’s Results Section of the Schedule of Findings and Questioned Costs.
Title: RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Accounting Policies: 1. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. 2. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. 3.Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. 4.State or local government redistributions of federal awards to the Municipality, known as “pass-through awards”, should be treated by the Municipality as though they were received directly from the Federal government. The Uniform Guidance requires the Schedule to include the name of the pass-through entity and the identifying number assigned by the pass-through entity for the Federal awards received as a sub-recipient. Numbers identified as N/AV are not available. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The reconciliation between the expenditures in the fund financial statements and the expenditures in the Schedule of Expenditures of Federal Awards is as follows: (See the Note to the SEFA for Chart)

Finding Details

Finding 2023-005
Municipality of Maunabo, Puerto Rico SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2023 SECTION II – Financial Statements Finding and Questioned Costs (continued) FINDING 2023-005 FEDERAL PROGRAM COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PASS THROUGH STATE HOUSING DEPARTMENT (ASSISTANCE LISTING NO.14.228) CATEGORY INTERNAL CONTROL/COMPLIANCE NONCOMPLIANCE REPORTING CONDITIONS As part of the evaluation of the Reporting Test we requested evidence of the filing of the Quarterly Report for the fiscal year 2022-2023. In the audit of the program, we noted the following: The quarterly reports for the following quarters had not been filed to the Puerto Rico Department of Housing: July-September 2022 October- December 2022 January-March 2023 April-June 2023 CRITERIA The delegation of funds contract signed between the Department of Housing of Puerto Rico and the Municipality establishes in its twentieth clause that the subrecipient is obliged to submit to the recipient the quarterly and annual reports for the projects developed with CDBG funds. CAUSE The Community Development Block Grant Program (CDBG) are not maintaining adequate internal controls to guarantee timely filing of quarterly reports. EFFECT The Municipality is exposed to the risk that the Puerto Rico Department of Housing halt the process of requisitioning funds from the administration line, affecting the operation of the program and the use of funds. RECOMMENDATION We recommend that the program establish internal control measures to ensure that the program's quarterly reports are submitted on time to the Puerto Rico Department of Housing. QUESTIONED COST None PRIOR YEAR Not Applicable MANAGEMENT RESPONSE We concur with the finding RESPONSIBLE OFFICIALS Mrs. Sandra Leon, Program Director
Finding 2023-006
Municipality of Maunabo, Puerto Rico SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2023 SECTION III – Federal Award Finding and Questioned Costs FINDING 2023-006 FEDERAL PROGRAM COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) (CFDA NO. 14.228) DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PASS THROUGH STATE HOUSING DEPARTMENT CATEGORY INTERNAL CONTROL/COMPLIANCE NONCOMPLIANCE EQUIPMENT AND REAL PROPERTY MANAGEMENT CONDITIONS The Municipality and the Community Development Block Grant Program (CDBG) are not maintaining adequate internal controls over property and equipment items acquired with Federal Funds. In testing property and equipment, we noted the following: • The property subsidiary ledger of the Program was not available for examination. • The Program personnel did not provide evidence that a physical inventory was performed during the fiscal year 2022-2023. CRITERIA 24 CFR 85.32(d) establishes that procedures for managing equipment will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft shall be investigated. 24 CFR 85.20 (b)(3), establishes that effective control and accountability must be maintained for all grant and subgrant cash, real and personal property, and other assets. Grantees and subgratees must adequately safeguard all such property and must assure that it is used solely for authorized purposes. CAUSE The CDBG Program has inadequate internal control procedures that guarantee adequate records, registering and safeguarding of property and equipment. EFFECT Without completion of a regular physical inventory and maintenance of an adequate property subsidiary record, the Program is at increased risk of theft or loss of equipment, it cannot be assured that Federal equipment records were accurately maintained, and it may not be aware of all equipment disposals or losses. In addition, sanctions could be imposed by the Lead Agency State CDBG Program or the federal awarding agency. RECOMMENDATION Management should prepare the property subsidiary ledger and a physical inventory must be made. In addition, the CDBG Program and the Accounting Department should establish a property control account and a subsidiary ledger to provide for the reconciliation of property. QUESTIONED COST: None PRIOR YEAR Not Applicable MANAGEMENT RESPONSE We concur with the finding RESPONSIBLE OFFICIALS Mrs. Sandra Leon, Program Director
Finding 2023-005
Municipality of Maunabo, Puerto Rico SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2023 SECTION II – Financial Statements Finding and Questioned Costs (continued) FINDING 2023-005 FEDERAL PROGRAM COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PASS THROUGH STATE HOUSING DEPARTMENT (ASSISTANCE LISTING NO.14.228) CATEGORY INTERNAL CONTROL/COMPLIANCE NONCOMPLIANCE REPORTING CONDITIONS As part of the evaluation of the Reporting Test we requested evidence of the filing of the Quarterly Report for the fiscal year 2022-2023. In the audit of the program, we noted the following: The quarterly reports for the following quarters had not been filed to the Puerto Rico Department of Housing: July-September 2022 October- December 2022 January-March 2023 April-June 2023 CRITERIA The delegation of funds contract signed between the Department of Housing of Puerto Rico and the Municipality establishes in its twentieth clause that the subrecipient is obliged to submit to the recipient the quarterly and annual reports for the projects developed with CDBG funds. CAUSE The Community Development Block Grant Program (CDBG) are not maintaining adequate internal controls to guarantee timely filing of quarterly reports. EFFECT The Municipality is exposed to the risk that the Puerto Rico Department of Housing halt the process of requisitioning funds from the administration line, affecting the operation of the program and the use of funds. RECOMMENDATION We recommend that the program establish internal control measures to ensure that the program's quarterly reports are submitted on time to the Puerto Rico Department of Housing. QUESTIONED COST None PRIOR YEAR Not Applicable MANAGEMENT RESPONSE We concur with the finding RESPONSIBLE OFFICIALS Mrs. Sandra Leon, Program Director
Finding 2023-006
Municipality of Maunabo, Puerto Rico SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2023 SECTION III – Federal Award Finding and Questioned Costs FINDING 2023-006 FEDERAL PROGRAM COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) (CFDA NO. 14.228) DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PASS THROUGH STATE HOUSING DEPARTMENT CATEGORY INTERNAL CONTROL/COMPLIANCE NONCOMPLIANCE EQUIPMENT AND REAL PROPERTY MANAGEMENT CONDITIONS The Municipality and the Community Development Block Grant Program (CDBG) are not maintaining adequate internal controls over property and equipment items acquired with Federal Funds. In testing property and equipment, we noted the following: • The property subsidiary ledger of the Program was not available for examination. • The Program personnel did not provide evidence that a physical inventory was performed during the fiscal year 2022-2023. CRITERIA 24 CFR 85.32(d) establishes that procedures for managing equipment will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft shall be investigated. 24 CFR 85.20 (b)(3), establishes that effective control and accountability must be maintained for all grant and subgrant cash, real and personal property, and other assets. Grantees and subgratees must adequately safeguard all such property and must assure that it is used solely for authorized purposes. CAUSE The CDBG Program has inadequate internal control procedures that guarantee adequate records, registering and safeguarding of property and equipment. EFFECT Without completion of a regular physical inventory and maintenance of an adequate property subsidiary record, the Program is at increased risk of theft or loss of equipment, it cannot be assured that Federal equipment records were accurately maintained, and it may not be aware of all equipment disposals or losses. In addition, sanctions could be imposed by the Lead Agency State CDBG Program or the federal awarding agency. RECOMMENDATION Management should prepare the property subsidiary ledger and a physical inventory must be made. In addition, the CDBG Program and the Accounting Department should establish a property control account and a subsidiary ledger to provide for the reconciliation of property. QUESTIONED COST: None PRIOR YEAR Not Applicable MANAGEMENT RESPONSE We concur with the finding RESPONSIBLE OFFICIALS Mrs. Sandra Leon, Program Director