FAC Explorer

Audit 310538

FY End
2023-06-30
Total Expended
$127.72M
Findings
10
Programs
13
Organization: Puerto Rico Department of Economic Development and Commerce (PR)
Year: 2023 Accepted: 2024-06-27
Auditor: Galindez LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
403461 2023-003 Material Weakness - A
403462 2023-004 Significant Deficiency Yes L
403463 2023-004 Significant Deficiency Yes L
403464 2023-004 Significant Deficiency Yes L
403465 2023-004 Significant Deficiency Yes L
979903 2023-003 Material Weakness - A
979904 2023-004 Significant Deficiency Yes L
979905 2023-004 Significant Deficiency Yes L
979906 2023-004 Significant Deficiency Yes L
979907 2023-004 Significant Deficiency Yes L

Programs

ALN Program Spent Major Findings
17.278 Wia Dislocated Worker Formula Grants $44.49M Yes 1
17.258 Wia Adult Program $27.25M Yes 1
17.259 Wia Youth Activities $26.74M Yes 1
21.027 Coronavirus State and Local Fiscal Recovery Funds $24.46M Yes 2
11.307 Economic Adjustment Assistance $1.59M - 0
81.041 State Energy Program $927,473 - 0
81.042 Weatherization Assistance for Low-Income Persons $613,286 - 0
93.630 Developmental Disabilities Basic Support and Advocacy Grants $611,550 - 0
12.002 Procurement Technical Assistance for Business Firms $341,113 - 0
59.061 State Trade and Export Promotion Pilot Grant Program $288,325 - 0
17.285 Apprenticeship USA Grants $156,449 - 0
17.245 Trade Adjustment Assistance $154,849 - 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $88,550 - 0

Contacts

Name Title Type
HHFQLX1DPWM7 Neysa Lopez Auditee
7877584747 Rafael Nieves Auditor
No contacts on file

Notes to SEFA

Title: Basis of presentation Accounting Policies: The Schedule is prepared from the Department’s accounting records. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be available or may be limited as to reimbursement. The financial transactions are recorded by the Department in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable, or when paid, whichever occurs first. De Minimis Rate Used: N Rate Explanation: In 2018, the Department signed an indirect cost rate agreement with the U.S. Department of Labor (DOL) on which the state agency would use an indirect cost of 20.37% for Workforce Innovation Opportunity Act Programs. As for the rest of the grants on which the DOL served as Grantor the indirect cost rate would be of 21.44%. This agreement was signed on February 18, 2021, and would be valid from July 1, 2018, through June 30, 2023. The accompanying supplementary Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of the Puerto Rico Department of Economic Development and Commerce (the Department) and is presented on the accrual basis of accounting. 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 the Schedule may differ from amounts presented in or used in the preparation of the Department’s financial statements. Because the Schedule presents only a selected portion of the activities of the Department, it is not intended to, and does not present the net position, changes in net position, and cash flows of the Department.
Title: Summary of significant accounting policies Accounting Policies: The Schedule is prepared from the Department’s accounting records. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be available or may be limited as to reimbursement. The financial transactions are recorded by the Department in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable, or when paid, whichever occurs first. De Minimis Rate Used: N Rate Explanation: In 2018, the Department signed an indirect cost rate agreement with the U.S. Department of Labor (DOL) on which the state agency would use an indirect cost of 20.37% for Workforce Innovation Opportunity Act Programs. As for the rest of the grants on which the DOL served as Grantor the indirect cost rate would be of 21.44%. This agreement was signed on February 18, 2021, and would be valid from July 1, 2018, through June 30, 2023. a. The Schedule is prepared from the Department’s accounting records. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be available or may be limited as to reimbursement. b. The financial transactions are recorded by the Department in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable, or when paid, whichever occurs first. d. In 2018, the Department signed an indirect cost rate agreement with the U.S. Department of Labor (DOL) on which the state agency would use an indirect cost of 20.37% for Workforce Innovation Opportunity Act Programs. As for the rest of the grants on which the DOL served as Grantor the indirect cost rate would be of 21.44%. This agreement was signed on February 18, 2021, and would be valid from July 1, 2018, through June 30, 2023.
Title: Assistance Listing Numbers (ALN) Accounting Policies: The Schedule is prepared from the Department’s accounting records. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be available or may be limited as to reimbursement. The financial transactions are recorded by the Department in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable, or when paid, whichever occurs first. De Minimis Rate Used: N Rate Explanation: In 2018, the Department signed an indirect cost rate agreement with the U.S. Department of Labor (DOL) on which the state agency would use an indirect cost of 20.37% for Workforce Innovation Opportunity Act Programs. As for the rest of the grants on which the DOL served as Grantor the indirect cost rate would be of 21.44%. This agreement was signed on February 18, 2021, and would be valid from July 1, 2018, through June 30, 2023. The Assistance Listing numbers (ALN) included in the Schedule are determined based on the program name, review of grant contract information and the public descriptions of federal assistance listings published by the U.S. Government on sam.gov. ALN are presented for those programs for which such numbers were available.

Finding Details

Finding 2023-003
Finding No. 2023-003 – Energy Incentive Program disbursement to Ineligible Providers and Beneficiaries Federal Program Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Name of Federal Agency U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Compliance Requirement Activities Allowed Type of Finding Internal control over compliance/non-compliance Category Material Weakness Criteria According to the 31 CFR Subtitle A Part 35 Subpart 35.6 (b)(3)(ii)(B)(2). Eligible uses 35.6(b) A recipient may use funds to respond to the public health emergency or its negative economic impacts if the use meets the criteria. (3) A recipient may use funds to respond to the public health emergency or its negative economic impacts on a beneficiary or class of beneficiaries for one or more of the following purposes unless such use is grossly disproportionate to the harm caused or exacerbated by the public health emergency or its negative economic impacts. (ii) Responding to the negative economic impacts of the public health emergency for purposes including, (B) assistance to small businesses including, (2) a program, service, capital expenditure, or other assistance that responds to disproportionately impacted small businesses, including rehabilitation of commercial properties; storefront and façade improvements; technical assistance, business incubators, and grants for start-ups or expansion costs for small businesses; and programs or services to support micro-businesses. Additional criteria were established in the Energy Incentive Program Guidance issued by the Disbursement Oversight Committee established by the Government of Puerto Rico. Condition During our examination, we noted twelve (12) suppliers’ instances and thirty-two (32) instances of beneficiaries, which based on the regulation previously indicated, the Energy Incentive was paid to suppliers and beneficiaries that not provided required supporting documentation to be eligible. Context From a sample of thirty-three (33) suppliers and beneficiaries that receive the Energy Incentive payments, twelve (12) suppliers and thirty-two (32) beneficiaries did not meet the eligibility criteria. INELIGIBLE SUPPLIERS Case Id Amount Disbursed Questioned Cost 815 343,800.00 - 2590 274,646.37 - 1333 225,000.00 - 1681 607,644.00 - 245 558,730.00 - 575 973,727.31 - 1587 220,796.31 - 191 141,100.00 - 353 187,276.00 - 831 449,615.56 - 256 374,970.00 - 880 386,979.00 - Total $ 4,744,284.55 $ - Context – (continued) INELIGIBLE BENEFICIARIES Case Id Amount Disbursed Questioned Cost 465 25,000.00 25,000.00 180 25,000.00 25,000.00 701 25,000.00 25,000.00 1162 25,000.00 25,000.00 1386 25,000.00 - 730 24,872.50 - 444 25,000.00 - 1145 14,800.00 - 462 14,556.50 - 2590 25,000.00 - 1333 25,000.00 - 1681 25,000.00 25,000.00 1247 22,095.00 - 211 25,000.00 - 960 25,000.00 - 245 25,000.00 25,000.00 2741 25,000.00 25,000.00 575 25,000.00 25,000.00 1587 9,088.82 - 191 25,000.00 - 353 25,000.00 - 828 25,000.00 - 1071 25,000.00 25,000.00 1531 19,123.13 19,123.13 831 22,101.63 22,101.63 247 25,000.00 - 256 25,000.00 - 1791 25,000.00 - 2529 25,000.00 25,000.00 2023 15,000.00 15,000.00 880 25,000.00 - 815 25,000.00 25,000.00 Total $ 741,637.58 $ 331,224.76 TOTAL $ 5,485,922.13 $ 331,224.76 Cause The program administration suffered several changes which caused that the procedures established in the program guide not be followed correctly and the required documents not being properly safeguarded. Effect As a result of this condition, the US Department of Treasury may request the return of funds, issue warnings and/or impose penalties to the Department. Questioned Costs The known questioned costs were calculated by the amounts disbursed to ineligible suppliers and beneficiaries. We did not include as questioned costs the amounts disbursed for certain suppliers and beneficiaries, because the Department provide the required documentation after the field work was completed. Based on this reason, we modified the questioned costs based on the beneficiaries with missing required documents that were disbursed, for total questioned costs amounting to $331,224.76. Identification as a Repeated Finding This is not a repeat finding from the immediate previous audit. Recommendation We recommend the Department to strengthen controls in eligibility determination and disbursement of federal funds to ensure the compliance with the requirements of the program. In addition, implement a document control system to comply with document retention requirement. Any government and non-government entity receiving Program funds will be required to retain use of funds records and supporting documentation for a period of five (5) years. Views of responsible officials and planned corrective actions. Refer to the corrective action plan on pages 112-113.
Finding 2023-004
Finding No. 2023-004 - Late Filing of Single Audit Reporting Package Federal Programs Workforce Innovation and Opportunity Act Cluster ALN 17.258, 17.259, and 17.278 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency U.S. Department of Labor (DOL) U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Compliance Requirement Reporting Type of Finding Internal Control over Compliance Category Significant Deficiency Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), § 200.512 Report submission (a) (1), “ the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day”. Condition The Department has not submitted the Single Audit Reporting Packages for the year ended June 30, 2023. Cause The Single Audit Reporting Packages late submission results from the operational changes caused by Act No. 171 of October 2, 2014 (Act No. 171) enactment. Act No. 171 integrated the Labor Development Program and the WIOA Cluster Programs with the Department. This merger, in conjunction with other difficulties in accounting and reporting processes, has delayed the Department’s efforts to bring up to date all federal filings. Effect If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or passthrough entity may take one or more of the following actions, as appropriate in the circumstances: a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or passthrough entity. b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. c) Wholly or partly suspend or terminate the Federal award. d) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency regulations (or in the case of a passthrough entity, recommend such a proceeding be initiated by a federal awarding agency). e) Withhold further Federal awards for the project or program. f) Take other remedies that may be legally available. Questioned Costs None. Identification as a Repeated Finding This is a repeat finding from the immediate previous audit, Finding No. 2022-005.Recommendation The data collection form and single audit reporting package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take whatever steps necessary to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Department’s operations and comply with the reporting deadlines. Views of responsible officials and planned corrective actions. Refer to the corrective action plan on pages 112-113.
Finding 2023-004
Finding No. 2023-004 - Late Filing of Single Audit Reporting Package Federal Programs Workforce Innovation and Opportunity Act Cluster ALN 17.258, 17.259, and 17.278 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency U.S. Department of Labor (DOL) U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Compliance Requirement Reporting Type of Finding Internal Control over Compliance Category Significant Deficiency Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), § 200.512 Report submission (a) (1), “ the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day”. Condition The Department has not submitted the Single Audit Reporting Packages for the year ended June 30, 2023. Cause The Single Audit Reporting Packages late submission results from the operational changes caused by Act No. 171 of October 2, 2014 (Act No. 171) enactment. Act No. 171 integrated the Labor Development Program and the WIOA Cluster Programs with the Department. This merger, in conjunction with other difficulties in accounting and reporting processes, has delayed the Department’s efforts to bring up to date all federal filings. Effect If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or passthrough entity may take one or more of the following actions, as appropriate in the circumstances: a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or passthrough entity. b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. c) Wholly or partly suspend or terminate the Federal award. d) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency regulations (or in the case of a passthrough entity, recommend such a proceeding be initiated by a federal awarding agency). e) Withhold further Federal awards for the project or program. f) Take other remedies that may be legally available. Questioned Costs None. Identification as a Repeated Finding This is a repeat finding from the immediate previous audit, Finding No. 2022-005.Recommendation The data collection form and single audit reporting package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take whatever steps necessary to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Department’s operations and comply with the reporting deadlines. Views of responsible officials and planned corrective actions. Refer to the corrective action plan on pages 112-113.
Finding 2023-004
Finding No. 2023-004 - Late Filing of Single Audit Reporting Package Federal Programs Workforce Innovation and Opportunity Act Cluster ALN 17.258, 17.259, and 17.278 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency U.S. Department of Labor (DOL) U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Compliance Requirement Reporting Type of Finding Internal Control over Compliance Category Significant Deficiency Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), § 200.512 Report submission (a) (1), “ the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day”. Condition The Department has not submitted the Single Audit Reporting Packages for the year ended June 30, 2023. Cause The Single Audit Reporting Packages late submission results from the operational changes caused by Act No. 171 of October 2, 2014 (Act No. 171) enactment. Act No. 171 integrated the Labor Development Program and the WIOA Cluster Programs with the Department. This merger, in conjunction with other difficulties in accounting and reporting processes, has delayed the Department’s efforts to bring up to date all federal filings. Effect If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or passthrough entity may take one or more of the following actions, as appropriate in the circumstances: a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or passthrough entity. b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. c) Wholly or partly suspend or terminate the Federal award. d) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency regulations (or in the case of a passthrough entity, recommend such a proceeding be initiated by a federal awarding agency). e) Withhold further Federal awards for the project or program. f) Take other remedies that may be legally available. Questioned Costs None. Identification as a Repeated Finding This is a repeat finding from the immediate previous audit, Finding No. 2022-005.Recommendation The data collection form and single audit reporting package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take whatever steps necessary to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Department’s operations and comply with the reporting deadlines. Views of responsible officials and planned corrective actions. Refer to the corrective action plan on pages 112-113.
Finding 2023-004
Finding No. 2023-004 - Late Filing of Single Audit Reporting Package Federal Programs Workforce Innovation and Opportunity Act Cluster ALN 17.258, 17.259, and 17.278 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency U.S. Department of Labor (DOL) U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Compliance Requirement Reporting Type of Finding Internal Control over Compliance Category Significant Deficiency Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), § 200.512 Report submission (a) (1), “ the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day”. Condition The Department has not submitted the Single Audit Reporting Packages for the year ended June 30, 2023. Cause The Single Audit Reporting Packages late submission results from the operational changes caused by Act No. 171 of October 2, 2014 (Act No. 171) enactment. Act No. 171 integrated the Labor Development Program and the WIOA Cluster Programs with the Department. This merger, in conjunction with other difficulties in accounting and reporting processes, has delayed the Department’s efforts to bring up to date all federal filings. Effect If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or passthrough entity may take one or more of the following actions, as appropriate in the circumstances: a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or passthrough entity. b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. c) Wholly or partly suspend or terminate the Federal award. d) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency regulations (or in the case of a passthrough entity, recommend such a proceeding be initiated by a federal awarding agency). e) Withhold further Federal awards for the project or program. f) Take other remedies that may be legally available. Questioned Costs None. Identification as a Repeated Finding This is a repeat finding from the immediate previous audit, Finding No. 2022-005.Recommendation The data collection form and single audit reporting package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take whatever steps necessary to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Department’s operations and comply with the reporting deadlines. Views of responsible officials and planned corrective actions. Refer to the corrective action plan on pages 112-113.
Finding 2023-003
Finding No. 2023-003 – Energy Incentive Program disbursement to Ineligible Providers and Beneficiaries Federal Program Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Name of Federal Agency U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Compliance Requirement Activities Allowed Type of Finding Internal control over compliance/non-compliance Category Material Weakness Criteria According to the 31 CFR Subtitle A Part 35 Subpart 35.6 (b)(3)(ii)(B)(2). Eligible uses 35.6(b) A recipient may use funds to respond to the public health emergency or its negative economic impacts if the use meets the criteria. (3) A recipient may use funds to respond to the public health emergency or its negative economic impacts on a beneficiary or class of beneficiaries for one or more of the following purposes unless such use is grossly disproportionate to the harm caused or exacerbated by the public health emergency or its negative economic impacts. (ii) Responding to the negative economic impacts of the public health emergency for purposes including, (B) assistance to small businesses including, (2) a program, service, capital expenditure, or other assistance that responds to disproportionately impacted small businesses, including rehabilitation of commercial properties; storefront and façade improvements; technical assistance, business incubators, and grants for start-ups or expansion costs for small businesses; and programs or services to support micro-businesses. Additional criteria were established in the Energy Incentive Program Guidance issued by the Disbursement Oversight Committee established by the Government of Puerto Rico. Condition During our examination, we noted twelve (12) suppliers’ instances and thirty-two (32) instances of beneficiaries, which based on the regulation previously indicated, the Energy Incentive was paid to suppliers and beneficiaries that not provided required supporting documentation to be eligible. Context From a sample of thirty-three (33) suppliers and beneficiaries that receive the Energy Incentive payments, twelve (12) suppliers and thirty-two (32) beneficiaries did not meet the eligibility criteria. INELIGIBLE SUPPLIERS Case Id Amount Disbursed Questioned Cost 815 343,800.00 - 2590 274,646.37 - 1333 225,000.00 - 1681 607,644.00 - 245 558,730.00 - 575 973,727.31 - 1587 220,796.31 - 191 141,100.00 - 353 187,276.00 - 831 449,615.56 - 256 374,970.00 - 880 386,979.00 - Total $ 4,744,284.55 $ - Context – (continued) INELIGIBLE BENEFICIARIES Case Id Amount Disbursed Questioned Cost 465 25,000.00 25,000.00 180 25,000.00 25,000.00 701 25,000.00 25,000.00 1162 25,000.00 25,000.00 1386 25,000.00 - 730 24,872.50 - 444 25,000.00 - 1145 14,800.00 - 462 14,556.50 - 2590 25,000.00 - 1333 25,000.00 - 1681 25,000.00 25,000.00 1247 22,095.00 - 211 25,000.00 - 960 25,000.00 - 245 25,000.00 25,000.00 2741 25,000.00 25,000.00 575 25,000.00 25,000.00 1587 9,088.82 - 191 25,000.00 - 353 25,000.00 - 828 25,000.00 - 1071 25,000.00 25,000.00 1531 19,123.13 19,123.13 831 22,101.63 22,101.63 247 25,000.00 - 256 25,000.00 - 1791 25,000.00 - 2529 25,000.00 25,000.00 2023 15,000.00 15,000.00 880 25,000.00 - 815 25,000.00 25,000.00 Total $ 741,637.58 $ 331,224.76 TOTAL $ 5,485,922.13 $ 331,224.76 Cause The program administration suffered several changes which caused that the procedures established in the program guide not be followed correctly and the required documents not being properly safeguarded. Effect As a result of this condition, the US Department of Treasury may request the return of funds, issue warnings and/or impose penalties to the Department. Questioned Costs The known questioned costs were calculated by the amounts disbursed to ineligible suppliers and beneficiaries. We did not include as questioned costs the amounts disbursed for certain suppliers and beneficiaries, because the Department provide the required documentation after the field work was completed. Based on this reason, we modified the questioned costs based on the beneficiaries with missing required documents that were disbursed, for total questioned costs amounting to $331,224.76. Identification as a Repeated Finding This is not a repeat finding from the immediate previous audit. Recommendation We recommend the Department to strengthen controls in eligibility determination and disbursement of federal funds to ensure the compliance with the requirements of the program. In addition, implement a document control system to comply with document retention requirement. Any government and non-government entity receiving Program funds will be required to retain use of funds records and supporting documentation for a period of five (5) years. Views of responsible officials and planned corrective actions. Refer to the corrective action plan on pages 112-113.
Finding 2023-004
Finding No. 2023-004 - Late Filing of Single Audit Reporting Package Federal Programs Workforce Innovation and Opportunity Act Cluster ALN 17.258, 17.259, and 17.278 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency U.S. Department of Labor (DOL) U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Compliance Requirement Reporting Type of Finding Internal Control over Compliance Category Significant Deficiency Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), § 200.512 Report submission (a) (1), “ the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day”. Condition The Department has not submitted the Single Audit Reporting Packages for the year ended June 30, 2023. Cause The Single Audit Reporting Packages late submission results from the operational changes caused by Act No. 171 of October 2, 2014 (Act No. 171) enactment. Act No. 171 integrated the Labor Development Program and the WIOA Cluster Programs with the Department. This merger, in conjunction with other difficulties in accounting and reporting processes, has delayed the Department’s efforts to bring up to date all federal filings. Effect If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or passthrough entity may take one or more of the following actions, as appropriate in the circumstances: a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or passthrough entity. b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. c) Wholly or partly suspend or terminate the Federal award. d) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency regulations (or in the case of a passthrough entity, recommend such a proceeding be initiated by a federal awarding agency). e) Withhold further Federal awards for the project or program. f) Take other remedies that may be legally available. Questioned Costs None. Identification as a Repeated Finding This is a repeat finding from the immediate previous audit, Finding No. 2022-005.Recommendation The data collection form and single audit reporting package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take whatever steps necessary to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Department’s operations and comply with the reporting deadlines. Views of responsible officials and planned corrective actions. Refer to the corrective action plan on pages 112-113.
Finding 2023-004
Finding No. 2023-004 - Late Filing of Single Audit Reporting Package Federal Programs Workforce Innovation and Opportunity Act Cluster ALN 17.258, 17.259, and 17.278 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency U.S. Department of Labor (DOL) U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Compliance Requirement Reporting Type of Finding Internal Control over Compliance Category Significant Deficiency Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), § 200.512 Report submission (a) (1), “ the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day”. Condition The Department has not submitted the Single Audit Reporting Packages for the year ended June 30, 2023. Cause The Single Audit Reporting Packages late submission results from the operational changes caused by Act No. 171 of October 2, 2014 (Act No. 171) enactment. Act No. 171 integrated the Labor Development Program and the WIOA Cluster Programs with the Department. This merger, in conjunction with other difficulties in accounting and reporting processes, has delayed the Department’s efforts to bring up to date all federal filings. Effect If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or passthrough entity may take one or more of the following actions, as appropriate in the circumstances: a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or passthrough entity. b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. c) Wholly or partly suspend or terminate the Federal award. d) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency regulations (or in the case of a passthrough entity, recommend such a proceeding be initiated by a federal awarding agency). e) Withhold further Federal awards for the project or program. f) Take other remedies that may be legally available. Questioned Costs None. Identification as a Repeated Finding This is a repeat finding from the immediate previous audit, Finding No. 2022-005.Recommendation The data collection form and single audit reporting package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take whatever steps necessary to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Department’s operations and comply with the reporting deadlines. Views of responsible officials and planned corrective actions. Refer to the corrective action plan on pages 112-113.
Finding 2023-004
Finding No. 2023-004 - Late Filing of Single Audit Reporting Package Federal Programs Workforce Innovation and Opportunity Act Cluster ALN 17.258, 17.259, and 17.278 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency U.S. Department of Labor (DOL) U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Compliance Requirement Reporting Type of Finding Internal Control over Compliance Category Significant Deficiency Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), § 200.512 Report submission (a) (1), “ the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day”. Condition The Department has not submitted the Single Audit Reporting Packages for the year ended June 30, 2023. Cause The Single Audit Reporting Packages late submission results from the operational changes caused by Act No. 171 of October 2, 2014 (Act No. 171) enactment. Act No. 171 integrated the Labor Development Program and the WIOA Cluster Programs with the Department. This merger, in conjunction with other difficulties in accounting and reporting processes, has delayed the Department’s efforts to bring up to date all federal filings. Effect If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or passthrough entity may take one or more of the following actions, as appropriate in the circumstances: a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or passthrough entity. b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. c) Wholly or partly suspend or terminate the Federal award. d) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency regulations (or in the case of a passthrough entity, recommend such a proceeding be initiated by a federal awarding agency). e) Withhold further Federal awards for the project or program. f) Take other remedies that may be legally available. Questioned Costs None. Identification as a Repeated Finding This is a repeat finding from the immediate previous audit, Finding No. 2022-005.Recommendation The data collection form and single audit reporting package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take whatever steps necessary to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Department’s operations and comply with the reporting deadlines. Views of responsible officials and planned corrective actions. Refer to the corrective action plan on pages 112-113.
Finding 2023-004
Finding No. 2023-004 - Late Filing of Single Audit Reporting Package Federal Programs Workforce Innovation and Opportunity Act Cluster ALN 17.258, 17.259, and 17.278 Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Federal Agency U.S. Department of Labor (DOL) U.S. Department of Treasury Pass-through Entity Puerto Rico Department of Treasury Compliance Requirement Reporting Type of Finding Internal Control over Compliance Category Significant Deficiency Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), § 200.512 Report submission (a) (1), “ the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day”. Condition The Department has not submitted the Single Audit Reporting Packages for the year ended June 30, 2023. Cause The Single Audit Reporting Packages late submission results from the operational changes caused by Act No. 171 of October 2, 2014 (Act No. 171) enactment. Act No. 171 integrated the Labor Development Program and the WIOA Cluster Programs with the Department. This merger, in conjunction with other difficulties in accounting and reporting processes, has delayed the Department’s efforts to bring up to date all federal filings. Effect If the Federal awarding agency or pass-through entity determines that noncompliance cannot be remedied by imposing additional conditions, the Federal awarding agency or passthrough entity may take one or more of the following actions, as appropriate in the circumstances: a) Temporarily withhold cash payments pending correction of the deficiency by the non-Federal entity or more severe enforcement action by the Federal awarding agency or passthrough entity. b) Disallow (that is, deny both use of funds and any applicable matching credit for) all or part of the cost of the activity or action not in compliance. c) Wholly or partly suspend or terminate the Federal award. d) Initiate suspension or debarment proceedings as authorized under 2 CFR part 180 and Federal awarding agency regulations (or in the case of a passthrough entity, recommend such a proceeding be initiated by a federal awarding agency). e) Withhold further Federal awards for the project or program. f) Take other remedies that may be legally available. Questioned Costs None. Identification as a Repeated Finding This is a repeat finding from the immediate previous audit, Finding No. 2022-005.Recommendation The data collection form and single audit reporting package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take whatever steps necessary to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Department’s operations and comply with the reporting deadlines. Views of responsible officials and planned corrective actions. Refer to the corrective action plan on pages 112-113.