Audit 345831

FY End
2024-06-30
Total Expended
$12.50M
Findings
8
Programs
12
Organization: Municipality of Cayey (PR)
Year: 2024 Accepted: 2025-03-12

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
526788 2024-004 Significant Deficiency Yes G
526789 2024-004 Significant Deficiency Yes G
526790 2024-003 Significant Deficiency Yes L
526791 2024-003 Significant Deficiency Yes L
1103230 2024-004 Significant Deficiency Yes G
1103231 2024-004 Significant Deficiency Yes G
1103232 2024-003 Significant Deficiency Yes L
1103233 2024-003 Significant Deficiency Yes L

Contacts

Name Title Type
FYR3BQB2D743 Natasha Vazquez Perez Auditee
7877383211 Angel A. Lopez Vega Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the modified-accrual basis of accounting, except for Section 8 Housing Choice Voucher Program (HCV). Expenditures are recognized when the related liability is incurred following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for HCV Program are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. Expenditures for Public assistance grants (FEMA) are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. 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. 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/A are not applicable and numbers identified as N/AV are not available. De Minimis Rate Used: N Rate Explanation: The Municipality elected not to use the 10% de minimis cost rate and did not charge indirect costs to federal grants during the year ended June 30, 2024. The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the Municipality under programs of the federal government for the year ended June 30, 2024. The information in this 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 the amounts presented in, or used in the preparation of, the basic financial statements. Because the schedule presents only a selected portion of the operations of the Municipality, it is not intended to and does not present the financial position and changes in net assets of the Municipality.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported on the Schedule are reported on the modified-accrual basis of accounting, except for Section 8 Housing Choice Voucher Program (HCV). Expenditures are recognized when the related liability is incurred following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for HCV Program are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. Expenditures for Public assistance grants (FEMA) are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. 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. 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/A are not applicable and numbers identified as N/AV are not available. De Minimis Rate Used: N Rate Explanation: The Municipality elected not to use the 10% de minimis cost rate and did not charge indirect costs to federal grants during the year ended June 30, 2024. Expenditures reported on the Schedule are reported on the modified-accrual basis of accounting, except for Section 8 Housing Choice Voucher Program (HCV). Expenditures are recognized when the related liability is incurred following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for HCV Program are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. Expenditures for Public assistance grants (FEMA) are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. 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. 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/A are not applicable and numbers identified as N/AV are not available.
Title: INDIRECT COSTS Accounting Policies: Expenditures reported on the Schedule are reported on the modified-accrual basis of accounting, except for Section 8 Housing Choice Voucher Program (HCV). Expenditures are recognized when the related liability is incurred following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for HCV Program are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. Expenditures for Public assistance grants (FEMA) are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. 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. 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/A are not applicable and numbers identified as N/AV are not available. De Minimis Rate Used: N Rate Explanation: The Municipality elected not to use the 10% de minimis cost rate and did not charge indirect costs to federal grants during the year ended June 30, 2024. The Municipality elected not to use the 10% de minimis cost rate and did not charge indirect costs to federal grants during the year ended June 30, 2024.
Title: RELATIONSHIP TO FEDERAL FINANCIAL REPORTS: Accounting Policies: Expenditures reported on the Schedule are reported on the modified-accrual basis of accounting, except for Section 8 Housing Choice Voucher Program (HCV). Expenditures are recognized when the related liability is incurred following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Expenditures for HCV Program are reported on a statutory basis as required by the U.S. Department of Housing and Urban Development. Such expenditures should equal the net ACC subsidy for the PHA’s fiscal period. Expenditures for Public assistance grants (FEMA) are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. 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. 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/A are not applicable and numbers identified as N/AV are not available. De Minimis Rate Used: N Rate Explanation: The Municipality elected not to use the 10% de minimis cost rate and did not charge indirect costs to federal grants during the year ended June 30, 2024. Amounts reported in the accompanying Schedule are included in the Head Start Fund, Public Assistance Grants Fund, American Rescue Plan Act Fund and in the Other Governmental Funds in the Municipality’s funds financial statements. The reconciliation between the expenditures in the fund’s financial statements and expenditures in the Schedule of Expenditures of Federal Awards is as follows: Description Amount General Fund $ 25,208,062 Debt Service Fund 2,543,386 Head Start Fund 4,463,412 Bond Issuance Fund 60,615 Cayey Development Fund 4,645,750 Public Assistance Grants Fund 886,294 American Rescue Plan Act Fund 3,227,688 Other Governmental Funds 6,203,754 Less: Non-Federal Expenditures (34,742,980) Total expenditures in Schedule of Expenditures of Federal Awards $ 12,495,981

Finding Details

Finding Reference 2024-004 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Puerto Rico Department of Family Program: Child Care and Development Block Grant (ALN 93.575) Compliance Requirement: Earmarking (G) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding 2023-004. Statement of Condition In our Earmarking Test, we found that the Program did not comply with the quality earmark limitation that requires the program to spend at least nine percent (9%) of the funds on quality activities and at least an additional three percent (3%) on quality improvement for infants and toddlers on the program. Also, we found that the Program did not comply with the direct spending earmark limitation that requires the program to spend no less than seventy percent (70%) to fund direct services. Criteria 45 CFR, Subpart F, Section 98.50 (b) (1) states that of the aggregate amount of funds expended by a State or Territory, no less than seven percent in fiscal years 2016 and 2017, eight percent in fiscal years 2018 and 2019, and nine percent in fiscal year 2020 and each succeeding fiscal year shall be used for activities designed to improve the quality of child care services and increase parental options for, and access to, high-quality child care as described at 45 CFR Subpart F, Section 98.53. Section 98.50 (b) (2) states that no less than three percent in fiscal year 2017 and each succeeding fiscal year shall be used to carry out activities as such activities relate to the quality of care for infants and toddlers. Also, section 98.50 (b) (3) states that nothing in this section shall preclude the State or Territory from reserving a larger percentage of funds to carry out activities described in paragraphs (b) (1) and (2) of Section 98.50. 45 CFR, Subpart F, Section 95.50 (f) (2) states that from Discretionary amounts provided for a fiscal year, the Lead Agency shall use no less than 70 percent to fund direct services (provided by the Lead Agency). Cause of Condition The program’s budget, approved by the pass-through entity, was not distributed according to the cost limitations required for the administrative, quality and direct costs. Therefore, the amounts spent per category of expenditure did not meet the minimum amounts. Effect of Condition The program is not in compliance with 45 CFR, Subpart F, Section 98.50. Recommendation We recommend the Program’s Management to request to the pass-through entity a revision of the approved budgeted amounts in order to make all the required adjustments to comply with the program cost limitations. Questioned Cost None Views of Responsible Officials and Planned Corrective Action In this case, for the year 2024-2025 it has already been verified that ACUDEN complies with the provisions of the contract. As an internal control and prevention measure, the budget sent by the Agency will be verified with the percentages (%) established in the contract. If they do not match, ACUDEN will be asked to amend the budget. Implementation Date: During fiscal year 2024-2025. Responsible Person: Mrs. Natasha Vásquez Federal Programs Director
Finding Reference 2024-004 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Puerto Rico Department of Family Program: Child Care and Development Block Grant (ALN 93.575) Compliance Requirement: Earmarking (G) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding 2023-004. Statement of Condition In our Earmarking Test, we found that the Program did not comply with the quality earmark limitation that requires the program to spend at least nine percent (9%) of the funds on quality activities and at least an additional three percent (3%) on quality improvement for infants and toddlers on the program. Also, we found that the Program did not comply with the direct spending earmark limitation that requires the program to spend no less than seventy percent (70%) to fund direct services. Criteria 45 CFR, Subpart F, Section 98.50 (b) (1) states that of the aggregate amount of funds expended by a State or Territory, no less than seven percent in fiscal years 2016 and 2017, eight percent in fiscal years 2018 and 2019, and nine percent in fiscal year 2020 and each succeeding fiscal year shall be used for activities designed to improve the quality of child care services and increase parental options for, and access to, high-quality child care as described at 45 CFR Subpart F, Section 98.53. Section 98.50 (b) (2) states that no less than three percent in fiscal year 2017 and each succeeding fiscal year shall be used to carry out activities as such activities relate to the quality of care for infants and toddlers. Also, section 98.50 (b) (3) states that nothing in this section shall preclude the State or Territory from reserving a larger percentage of funds to carry out activities described in paragraphs (b) (1) and (2) of Section 98.50. 45 CFR, Subpart F, Section 95.50 (f) (2) states that from Discretionary amounts provided for a fiscal year, the Lead Agency shall use no less than 70 percent to fund direct services (provided by the Lead Agency). Cause of Condition The program’s budget, approved by the pass-through entity, was not distributed according to the cost limitations required for the administrative, quality and direct costs. Therefore, the amounts spent per category of expenditure did not meet the minimum amounts. Effect of Condition The program is not in compliance with 45 CFR, Subpart F, Section 98.50. Recommendation We recommend the Program’s Management to request to the pass-through entity a revision of the approved budgeted amounts in order to make all the required adjustments to comply with the program cost limitations. Questioned Cost None Views of Responsible Officials and Planned Corrective Action In this case, for the year 2024-2025 it has already been verified that ACUDEN complies with the provisions of the contract. As an internal control and prevention measure, the budget sent by the Agency will be verified with the percentages (%) established in the contract. If they do not match, ACUDEN will be asked to amend the budget. Implementation Date: During fiscal year 2024-2025. Responsible Person: Mrs. Natasha Vásquez Federal Programs Director
Finding Reference 2024-003 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Puerto Rico Department of Family Program: Head Start Program Cluster (ALN 93.600 & 93.365) Compliance Requirement: Reporting - Financial Administration (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding(s) 2023-003, 2022-003 and 2021-003 . Statement of Condition In our Reporting Test, we found the financial reports do not agree with the program accounting records. Criteria The OMB Common Rules, Subpart C, Section .20 (b) (1), states that the grantee must maintain internal control procedures that permit proper tracing of funds to the accounting records. Also, it requires accurate, current and complete disclosure of financial results. Cause of Condition The accounting system is not used as a reporting source. Adequate internal controls do not exist to ensure that the accounting system is used, and the information is reconciled with the closing reports submitted to the federal agencies. Effect of Condition The program is not in compliance with the Common Rules, Subpart C, Section .20 (b) (1). Recommendation We recommend the Program establish monitoring procedures to ensure the accuracy of accounting records and the correct completion of the closing reports. The Program fiscal area ensures that accounting records are updated at the end of each month in order to prepare accurate reports for the federal agency. Questioned Cost None Views of Responsible Officials and Planned Corrective Action The Head Start and Early Head Start Program accountant will reconcile transactions to the general ledger on a monthly basis, that is, review and compare each transaction to the IDs. After reviewing, appropriate corrections will be made if necessary. Implementation Date: During fiscal year 2024-2025. Responsible Person: Mrs. Idenisse Díaz Head Start Program Director
Finding Reference 2024-003 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Puerto Rico Department of Family Program: Head Start Program Cluster (ALN 93.600 & 93.365) Compliance Requirement: Reporting - Financial Administration (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding(s) 2023-003, 2022-003 and 2021-003 . Statement of Condition In our Reporting Test, we found the financial reports do not agree with the program accounting records. Criteria The OMB Common Rules, Subpart C, Section .20 (b) (1), states that the grantee must maintain internal control procedures that permit proper tracing of funds to the accounting records. Also, it requires accurate, current and complete disclosure of financial results. Cause of Condition The accounting system is not used as a reporting source. Adequate internal controls do not exist to ensure that the accounting system is used, and the information is reconciled with the closing reports submitted to the federal agencies. Effect of Condition The program is not in compliance with the Common Rules, Subpart C, Section .20 (b) (1). Recommendation We recommend the Program establish monitoring procedures to ensure the accuracy of accounting records and the correct completion of the closing reports. The Program fiscal area ensures that accounting records are updated at the end of each month in order to prepare accurate reports for the federal agency. Questioned Cost None Views of Responsible Officials and Planned Corrective Action The Head Start and Early Head Start Program accountant will reconcile transactions to the general ledger on a monthly basis, that is, review and compare each transaction to the IDs. After reviewing, appropriate corrections will be made if necessary. Implementation Date: During fiscal year 2024-2025. Responsible Person: Mrs. Idenisse Díaz Head Start Program Director
Finding Reference 2024-004 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Puerto Rico Department of Family Program: Child Care and Development Block Grant (ALN 93.575) Compliance Requirement: Earmarking (G) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding 2023-004. Statement of Condition In our Earmarking Test, we found that the Program did not comply with the quality earmark limitation that requires the program to spend at least nine percent (9%) of the funds on quality activities and at least an additional three percent (3%) on quality improvement for infants and toddlers on the program. Also, we found that the Program did not comply with the direct spending earmark limitation that requires the program to spend no less than seventy percent (70%) to fund direct services. Criteria 45 CFR, Subpart F, Section 98.50 (b) (1) states that of the aggregate amount of funds expended by a State or Territory, no less than seven percent in fiscal years 2016 and 2017, eight percent in fiscal years 2018 and 2019, and nine percent in fiscal year 2020 and each succeeding fiscal year shall be used for activities designed to improve the quality of child care services and increase parental options for, and access to, high-quality child care as described at 45 CFR Subpart F, Section 98.53. Section 98.50 (b) (2) states that no less than three percent in fiscal year 2017 and each succeeding fiscal year shall be used to carry out activities as such activities relate to the quality of care for infants and toddlers. Also, section 98.50 (b) (3) states that nothing in this section shall preclude the State or Territory from reserving a larger percentage of funds to carry out activities described in paragraphs (b) (1) and (2) of Section 98.50. 45 CFR, Subpart F, Section 95.50 (f) (2) states that from Discretionary amounts provided for a fiscal year, the Lead Agency shall use no less than 70 percent to fund direct services (provided by the Lead Agency). Cause of Condition The program’s budget, approved by the pass-through entity, was not distributed according to the cost limitations required for the administrative, quality and direct costs. Therefore, the amounts spent per category of expenditure did not meet the minimum amounts. Effect of Condition The program is not in compliance with 45 CFR, Subpart F, Section 98.50. Recommendation We recommend the Program’s Management to request to the pass-through entity a revision of the approved budgeted amounts in order to make all the required adjustments to comply with the program cost limitations. Questioned Cost None Views of Responsible Officials and Planned Corrective Action In this case, for the year 2024-2025 it has already been verified that ACUDEN complies with the provisions of the contract. As an internal control and prevention measure, the budget sent by the Agency will be verified with the percentages (%) established in the contract. If they do not match, ACUDEN will be asked to amend the budget. Implementation Date: During fiscal year 2024-2025. Responsible Person: Mrs. Natasha Vásquez Federal Programs Director
Finding Reference 2024-004 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Puerto Rico Department of Family Program: Child Care and Development Block Grant (ALN 93.575) Compliance Requirement: Earmarking (G) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding 2023-004. Statement of Condition In our Earmarking Test, we found that the Program did not comply with the quality earmark limitation that requires the program to spend at least nine percent (9%) of the funds on quality activities and at least an additional three percent (3%) on quality improvement for infants and toddlers on the program. Also, we found that the Program did not comply with the direct spending earmark limitation that requires the program to spend no less than seventy percent (70%) to fund direct services. Criteria 45 CFR, Subpart F, Section 98.50 (b) (1) states that of the aggregate amount of funds expended by a State or Territory, no less than seven percent in fiscal years 2016 and 2017, eight percent in fiscal years 2018 and 2019, and nine percent in fiscal year 2020 and each succeeding fiscal year shall be used for activities designed to improve the quality of child care services and increase parental options for, and access to, high-quality child care as described at 45 CFR Subpart F, Section 98.53. Section 98.50 (b) (2) states that no less than three percent in fiscal year 2017 and each succeeding fiscal year shall be used to carry out activities as such activities relate to the quality of care for infants and toddlers. Also, section 98.50 (b) (3) states that nothing in this section shall preclude the State or Territory from reserving a larger percentage of funds to carry out activities described in paragraphs (b) (1) and (2) of Section 98.50. 45 CFR, Subpart F, Section 95.50 (f) (2) states that from Discretionary amounts provided for a fiscal year, the Lead Agency shall use no less than 70 percent to fund direct services (provided by the Lead Agency). Cause of Condition The program’s budget, approved by the pass-through entity, was not distributed according to the cost limitations required for the administrative, quality and direct costs. Therefore, the amounts spent per category of expenditure did not meet the minimum amounts. Effect of Condition The program is not in compliance with 45 CFR, Subpart F, Section 98.50. Recommendation We recommend the Program’s Management to request to the pass-through entity a revision of the approved budgeted amounts in order to make all the required adjustments to comply with the program cost limitations. Questioned Cost None Views of Responsible Officials and Planned Corrective Action In this case, for the year 2024-2025 it has already been verified that ACUDEN complies with the provisions of the contract. As an internal control and prevention measure, the budget sent by the Agency will be verified with the percentages (%) established in the contract. If they do not match, ACUDEN will be asked to amend the budget. Implementation Date: During fiscal year 2024-2025. Responsible Person: Mrs. Natasha Vásquez Federal Programs Director
Finding Reference 2024-003 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Puerto Rico Department of Family Program: Head Start Program Cluster (ALN 93.600 & 93.365) Compliance Requirement: Reporting - Financial Administration (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding(s) 2023-003, 2022-003 and 2021-003 . Statement of Condition In our Reporting Test, we found the financial reports do not agree with the program accounting records. Criteria The OMB Common Rules, Subpart C, Section .20 (b) (1), states that the grantee must maintain internal control procedures that permit proper tracing of funds to the accounting records. Also, it requires accurate, current and complete disclosure of financial results. Cause of Condition The accounting system is not used as a reporting source. Adequate internal controls do not exist to ensure that the accounting system is used, and the information is reconciled with the closing reports submitted to the federal agencies. Effect of Condition The program is not in compliance with the Common Rules, Subpart C, Section .20 (b) (1). Recommendation We recommend the Program establish monitoring procedures to ensure the accuracy of accounting records and the correct completion of the closing reports. The Program fiscal area ensures that accounting records are updated at the end of each month in order to prepare accurate reports for the federal agency. Questioned Cost None Views of Responsible Officials and Planned Corrective Action The Head Start and Early Head Start Program accountant will reconcile transactions to the general ledger on a monthly basis, that is, review and compare each transaction to the IDs. After reviewing, appropriate corrections will be made if necessary. Implementation Date: During fiscal year 2024-2025. Responsible Person: Mrs. Idenisse Díaz Head Start Program Director
Finding Reference 2024-003 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Puerto Rico Department of Family Program: Head Start Program Cluster (ALN 93.600 & 93.365) Compliance Requirement: Reporting - Financial Administration (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding(s) 2023-003, 2022-003 and 2021-003 . Statement of Condition In our Reporting Test, we found the financial reports do not agree with the program accounting records. Criteria The OMB Common Rules, Subpart C, Section .20 (b) (1), states that the grantee must maintain internal control procedures that permit proper tracing of funds to the accounting records. Also, it requires accurate, current and complete disclosure of financial results. Cause of Condition The accounting system is not used as a reporting source. Adequate internal controls do not exist to ensure that the accounting system is used, and the information is reconciled with the closing reports submitted to the federal agencies. Effect of Condition The program is not in compliance with the Common Rules, Subpart C, Section .20 (b) (1). Recommendation We recommend the Program establish monitoring procedures to ensure the accuracy of accounting records and the correct completion of the closing reports. The Program fiscal area ensures that accounting records are updated at the end of each month in order to prepare accurate reports for the federal agency. Questioned Cost None Views of Responsible Officials and Planned Corrective Action The Head Start and Early Head Start Program accountant will reconcile transactions to the general ledger on a monthly basis, that is, review and compare each transaction to the IDs. After reviewing, appropriate corrections will be made if necessary. Implementation Date: During fiscal year 2024-2025. Responsible Person: Mrs. Idenisse Díaz Head Start Program Director