FAC Explorer

Audit 304403

FY End
2023-06-30
Total Expended
$291.92M
Findings
6
Programs
3
Organization: Puerto Rico Housing Finance Authority (PR)
Year: 2023 Accepted: 2024-04-24
Auditor: De Angel & Compañia CPA LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
394522 2023-001 Significant Deficiency Yes L
394523 2023-002 Significant Deficiency Yes P
394524 2023-002 Significant Deficiency Yes P
970964 2023-001 Significant Deficiency Yes L
970965 2023-002 Significant Deficiency Yes P
970966 2023-002 Significant Deficiency Yes P

Programs

ALN Program Spent Major Findings
14.288 Community Development Block Grant - Disaster Recovery $243.32M Yes 2
21.026 Homeowner Assistance Fund $45.74M Yes 1
14.239 Home Investment Partnerships Program $2.86M - 0

Contacts

Name Title Type
GLWEX1T5V3A3 Hector L. Orsini Velez Auditee
7879460045 CPA Carlos De Angel Ramirez Auditor
No contacts on file

Notes to SEFA

Title: Schedule Not in Agreement with Other Federal Awards Reporting Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Puerto Rico Housing Finance Authority (the Authority) and 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). The Authority's government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, which conform to accounting principles generally accepted in the United States of America. The accounts of the Authority are presented based on funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred inflows, liabilities, and deferred outflows, fund balance/net position, revenues, and expenditures/expenses. Government resources are allocated to and accounted for by individual funds based upon the purposes for which they are to be spent and how spending activities are controlled. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles, wherein certain types of expenditures are not allowable or are limited to reimbursement. De Minimis Rate Used: N Rate Explanation: For the purpose of charging indirect costs to a federal award, the Authority has elected not to use the 10-percent de minimis indirect cost rate, nor prepared or submitted an indirect cost proposal as permitted by CFR 200.414 of the Uniform Guidance. The information included in the Schedule may not fully agree with other federal awards reports, submitted directly to the federal grantor agency because, among other reasons, the award report may (a) be prepared for a different fiscal period and (b) include cumulative data (from prior years) rather than data from the current year only.
Title: Assistance Listing Number Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Puerto Rico Housing Finance Authority (the Authority) and 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). The Authority's government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, which conform to accounting principles generally accepted in the United States of America. The accounts of the Authority are presented based on funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred inflows, liabilities, and deferred outflows, fund balance/net position, revenues, and expenditures/expenses. Government resources are allocated to and accounted for by individual funds based upon the purposes for which they are to be spent and how spending activities are controlled. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles, wherein certain types of expenditures are not allowable or are limited to reimbursement. De Minimis Rate Used: N Rate Explanation: For the purpose of charging indirect costs to a federal award, the Authority has elected not to use the 10-percent de minimis indirect cost rate, nor prepared or submitted an indirect cost proposal as permitted by CFR 200.414 of the Uniform Guidance. The Assistance Listing Number is a program identification number presented for programs in which such numbers are available. The first two digits identify the federal department or agency that administers the program, and the last three numbers are assigned by numerical sequence.
Title: Relationship to the Financial Statements Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Puerto Rico Housing Finance Authority (the Authority) and 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). The Authority's government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, which conform to accounting principles generally accepted in the United States of America. The accounts of the Authority are presented based on funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred inflows, liabilities, and deferred outflows, fund balance/net position, revenues, and expenditures/expenses. Government resources are allocated to and accounted for by individual funds based upon the purposes for which they are to be spent and how spending activities are controlled. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles, wherein certain types of expenditures are not allowable or are limited to reimbursement. De Minimis Rate Used: N Rate Explanation: For the purpose of charging indirect costs to a federal award, the Authority has elected not to use the 10-percent de minimis indirect cost rate, nor prepared or submitted an indirect cost proposal as permitted by CFR 200.414 of the Uniform Guidance. A reconciliation of total expenditures related to federal programs included in the statement of revenues, expenditures, and changes in fund balances - governmental funds and the statement of revenues, expenses, and changes in net position – proprietary funds to total expenditures included in the schedule of expenditures of federal awards is as follows: Major Funds: HUD Programs $138,717,675 HOME Programs 2,855,954 Community Development Block Grant - Disaster Recovery 243,323,553 Homeowner Assistance Fund 45,736,352 Less: Performance Based Contract Administrator Program (CFDA 14.327) excluded from coverage under Uniform Guidance 138,717,675 Total expenditures in schedule of expenditures of federal awards 291,915,859
Title: Pass Trough Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Puerto Rico Housing Finance Authority (the Authority) and 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). The Authority's government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, which conform to accounting principles generally accepted in the United States of America. The accounts of the Authority are presented based on funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred inflows, liabilities, and deferred outflows, fund balance/net position, revenues, and expenditures/expenses. Government resources are allocated to and accounted for by individual funds based upon the purposes for which they are to be spent and how spending activities are controlled. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles, wherein certain types of expenditures are not allowable or are limited to reimbursement. De Minimis Rate Used: N Rate Explanation: For the purpose of charging indirect costs to a federal award, the Authority has elected not to use the 10-percent de minimis indirect cost rate, nor prepared or submitted an indirect cost proposal as permitted by CFR 200.414 of the Uniform Guidance. No federal grant dollar has been passed through to sub-recipient.

Finding Details

Finding 2023-001
Name of Federal Agency US Department of Housing and Urban Development (HUD) Pass-through the Puerto Rico Housing Department Federal Program 14.288 Community Development Block Grant - Disaster Recovery Category Compliance / Internal control Compliance Requirements Reporting Criteria Uniform Guidance, Part 200.329 (c)(i) established that the non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes. Reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. As per agreement with the Authority clause II (b) established that the Authority shall submit regular monthly progress reports to the Puerto Rico Department of Housing (PRDOH), on the form and with the content to be specified and required by the PRDOH. The PRDOH will later notify the Authority in writing the guidelines and requirements applicable to the submittal of the monthly progress reports, and such notification shall be deemed incorporated by reference to this Agreement. This clause is in accordance with the guidance of the Subrecipient Guide. Condition During our procedures performed to determine compliance with reporting requirements, we noted that the Progress Report was not submitted on time to Puerto Rico Department of Housing (PRDOH). Cause and Potential Effect Noncompliance with the reporting requirements could lead to significant administrative actions by the grantor, including a reduction in the amounts to be awarded. In addition, it prevents the grantor from monitoring the performance of the program and could be interpreted as a failure to achieve program objectives.Questioned Costs None Recommendation The Authority shall ensure effective supervision over its reporting processes to guarantee the timely preparation and submission of progress reports. It is advised that the Authority prioritize providing comprehensive training to personnel responsible for preparing, reviewing, and approving performance reports. This training should focus on equipping them with the necessary skills and knowledge to include all relevant data elements and adhere to deadlines consistently. Views of responsible officials: Pursuant to the Subrecipient Agreement, on July 2, 2020, the Authority became the administrator of the Program. However, it wasn’t until June 1, 2021, when the Authority formed the Division, which consists of a team of employees designated to administer and implement the Program, and its priorities include ensuring that all Program requirements are being met. This includes submitting the Progress Reports that were past due before the Division’s formation and making sure that all future reports are submitted on time. Since then, the Division has been submitting the Progress Reports on time and is currently up to date. Moreover, the following measures have been taken to ensure compliance with this requirement: 1. On October of 2021, the Progress Reports began to be submitted electronically through the Grant Compliance Portal (GCP), making this process more efficient and faster. 2. The staff members responsible for submitting the Progress Reports are given frequent training on the report’s requirements and the GCP usage. 3. The Division continues to recruit additional personnel as needed. Therefore, the Program is currently in compliance with the Progress Reports submittal and the issues that might have caused any delays in submitting such reports before the Division’s formation were addressed. Responsible Person: Mrs. Janet Perez Cotto
Finding 2023-002
Name of Federal Agency U.S. Department of Housing and Urban Development U.S. Department of Treasury Federal Program Various Assistance Listing Number Various Category Compliance/Internal Control Compliance Requirements Reporting Criteria Uniform Guidance, Part 200.512 (a) established that the audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 days after receipt of the auditor's reports, or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. Unless restricted by law or regulation the auditee shall make copies available for public inspection. Condition The Data Collection Form and Single Audit reporting package were not submitted within nine months after the end of the audit period. Also did not submit six (6) months beyond the normal due date nor on extension date. Cause and Effect Information to complete the financial statements audit procedures was not available within the required period. Data collection form and single audit report were not submitted in a timely manner as required by the Uniform Guidance. A similar audit finding was reported during the prior audit (2022-002), (2021-002), (2020-002); (2019-002) and (2018-002).96 Questioned Cost None Recommendation Data collection from and single audit package shall be submitted within the required due dates. Views of Responsible Officials The delay in submitting the data collection form was an exceptional occurrence caused by a delay in obtaining upper management approval of the Single Audit Report. We anticipate submitting the data collection form to the Department of Housing and Urban Development on the same day following the completion of the Audited Financial Statements. Responsible Person: Hector L. Orsini Vélez / Amanda Oyola
Finding 2023-002
Name of Federal Agency U.S. Department of Housing and Urban Development U.S. Department of Treasury Federal Program Various Assistance Listing Number Various Category Compliance/Internal Control Compliance Requirements Reporting Criteria Uniform Guidance, Part 200.512 (a) established that the audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 days after receipt of the auditor's reports, or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. Unless restricted by law or regulation the auditee shall make copies available for public inspection. Condition The Data Collection Form and Single Audit reporting package were not submitted within nine months after the end of the audit period. Also did not submit six (6) months beyond the normal due date nor on extension date. Cause and Effect Information to complete the financial statements audit procedures was not available within the required period. Data collection form and single audit report were not submitted in a timely manner as required by the Uniform Guidance. A similar audit finding was reported during the prior audit (2022-002), (2021-002), (2020-002); (2019-002) and (2018-002).96 Questioned Cost None Recommendation Data collection from and single audit package shall be submitted within the required due dates. Views of Responsible Officials The delay in submitting the data collection form was an exceptional occurrence caused by a delay in obtaining upper management approval of the Single Audit Report. We anticipate submitting the data collection form to the Department of Housing and Urban Development on the same day following the completion of the Audited Financial Statements. Responsible Person: Hector L. Orsini Vélez / Amanda Oyola
Finding 2023-001
Name of Federal Agency US Department of Housing and Urban Development (HUD) Pass-through the Puerto Rico Housing Department Federal Program 14.288 Community Development Block Grant - Disaster Recovery Category Compliance / Internal control Compliance Requirements Reporting Criteria Uniform Guidance, Part 200.329 (c)(i) established that the non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes. Reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. As per agreement with the Authority clause II (b) established that the Authority shall submit regular monthly progress reports to the Puerto Rico Department of Housing (PRDOH), on the form and with the content to be specified and required by the PRDOH. The PRDOH will later notify the Authority in writing the guidelines and requirements applicable to the submittal of the monthly progress reports, and such notification shall be deemed incorporated by reference to this Agreement. This clause is in accordance with the guidance of the Subrecipient Guide. Condition During our procedures performed to determine compliance with reporting requirements, we noted that the Progress Report was not submitted on time to Puerto Rico Department of Housing (PRDOH). Cause and Potential Effect Noncompliance with the reporting requirements could lead to significant administrative actions by the grantor, including a reduction in the amounts to be awarded. In addition, it prevents the grantor from monitoring the performance of the program and could be interpreted as a failure to achieve program objectives.Questioned Costs None Recommendation The Authority shall ensure effective supervision over its reporting processes to guarantee the timely preparation and submission of progress reports. It is advised that the Authority prioritize providing comprehensive training to personnel responsible for preparing, reviewing, and approving performance reports. This training should focus on equipping them with the necessary skills and knowledge to include all relevant data elements and adhere to deadlines consistently. Views of responsible officials: Pursuant to the Subrecipient Agreement, on July 2, 2020, the Authority became the administrator of the Program. However, it wasn’t until June 1, 2021, when the Authority formed the Division, which consists of a team of employees designated to administer and implement the Program, and its priorities include ensuring that all Program requirements are being met. This includes submitting the Progress Reports that were past due before the Division’s formation and making sure that all future reports are submitted on time. Since then, the Division has been submitting the Progress Reports on time and is currently up to date. Moreover, the following measures have been taken to ensure compliance with this requirement: 1. On October of 2021, the Progress Reports began to be submitted electronically through the Grant Compliance Portal (GCP), making this process more efficient and faster. 2. The staff members responsible for submitting the Progress Reports are given frequent training on the report’s requirements and the GCP usage. 3. The Division continues to recruit additional personnel as needed. Therefore, the Program is currently in compliance with the Progress Reports submittal and the issues that might have caused any delays in submitting such reports before the Division’s formation were addressed. Responsible Person: Mrs. Janet Perez Cotto
Finding 2023-002
Name of Federal Agency U.S. Department of Housing and Urban Development U.S. Department of Treasury Federal Program Various Assistance Listing Number Various Category Compliance/Internal Control Compliance Requirements Reporting Criteria Uniform Guidance, Part 200.512 (a) established that the audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 days after receipt of the auditor's reports, or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. Unless restricted by law or regulation the auditee shall make copies available for public inspection. Condition The Data Collection Form and Single Audit reporting package were not submitted within nine months after the end of the audit period. Also did not submit six (6) months beyond the normal due date nor on extension date. Cause and Effect Information to complete the financial statements audit procedures was not available within the required period. Data collection form and single audit report were not submitted in a timely manner as required by the Uniform Guidance. A similar audit finding was reported during the prior audit (2022-002), (2021-002), (2020-002); (2019-002) and (2018-002).96 Questioned Cost None Recommendation Data collection from and single audit package shall be submitted within the required due dates. Views of Responsible Officials The delay in submitting the data collection form was an exceptional occurrence caused by a delay in obtaining upper management approval of the Single Audit Report. We anticipate submitting the data collection form to the Department of Housing and Urban Development on the same day following the completion of the Audited Financial Statements. Responsible Person: Hector L. Orsini Vélez / Amanda Oyola
Finding 2023-002
Name of Federal Agency U.S. Department of Housing and Urban Development U.S. Department of Treasury Federal Program Various Assistance Listing Number Various Category Compliance/Internal Control Compliance Requirements Reporting Criteria Uniform Guidance, Part 200.512 (a) established that the audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 days after receipt of the auditor's reports, or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. Unless restricted by law or regulation the auditee shall make copies available for public inspection. Condition The Data Collection Form and Single Audit reporting package were not submitted within nine months after the end of the audit period. Also did not submit six (6) months beyond the normal due date nor on extension date. Cause and Effect Information to complete the financial statements audit procedures was not available within the required period. Data collection form and single audit report were not submitted in a timely manner as required by the Uniform Guidance. A similar audit finding was reported during the prior audit (2022-002), (2021-002), (2020-002); (2019-002) and (2018-002).96 Questioned Cost None Recommendation Data collection from and single audit package shall be submitted within the required due dates. Views of Responsible Officials The delay in submitting the data collection form was an exceptional occurrence caused by a delay in obtaining upper management approval of the Single Audit Report. We anticipate submitting the data collection form to the Department of Housing and Urban Development on the same day following the completion of the Audited Financial Statements. Responsible Person: Hector L. Orsini Vélez / Amanda Oyola