Audit 349841

FY End
2024-06-30
Total Expended
$14.65M
Findings
2
Programs
11

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
539144 2024-001 Significant Deficiency Yes L
1115586 2024-001 Significant Deficiency Yes L

Contacts

Name Title Type
UCNFZ176DYF4 Victor Figueroa Auditee
7878732060 Janice Roman Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: A. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. B. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. C. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. D. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the programs Section 8 Housing Choice Vouchers (HCV) and Disaster Grants- Public Assistance. Expenditures for HCV Program are equal to the ACC subsidy for the PHA fiscal period. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the Federal grant activity of the Municipality of Sabana Grande, Puerto Rico (Municipality) under programs of the Federal government for the fiscal year ended June 30, 2024. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this Schedule may differ from amounts presented in or used in the preparation of the basic financial statements. The reporting entity is defined in Note 1 (A) to the basic financial statements.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: A. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. B. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. C. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. D. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the programs Section 8 Housing Choice Vouchers (HCV) and Disaster Grants- Public Assistance. Expenditures for HCV Program are equal to the ACC subsidy for the PHA fiscal period. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. A. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. B. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. C. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. D. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the programs Section 8 Housing Choice Vouchers (HCV) and Disaster Grants- Public Assistance. Expenditures for HCV Program are equal to the ACC subsidy for the PHA fiscal period. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred.
Title: ASSISTANCE LISTING NUMBER Accounting Policies: A. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. B. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. C. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. D. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the programs Section 8 Housing Choice Vouchers (HCV) and Disaster Grants- Public Assistance. Expenditures for HCV Program are equal to the ACC subsidy for the PHA fiscal period. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Assistance Listing Numbers included in this Schedule are determined based on the program name, review of grant contract information and the Sam.gov website. Assistance listings are detailed public descriptions of federal programs that provide grants, loans, scholarships, insurance, and other types of assistance awards.
Title: INDIRECT COST RATE Accounting Policies: A. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. B. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. C. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. D. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the programs Section 8 Housing Choice Vouchers (HCV) and Disaster Grants- Public Assistance. Expenditures for HCV Program are equal to the ACC subsidy for the PHA fiscal period. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance.
Title: PASS THROUGH GRANTOR'S NUMBER Accounting Policies: A. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. B. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. C. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. D. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the programs Section 8 Housing Choice Vouchers (HCV) and Disaster Grants- Public Assistance. Expenditures for HCV Program are equal to the ACC subsidy for the PHA fiscal period. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. State or local government redistribution of federal awards to the Municipality, treated as if they were received directly from the federal government. The Uniform Guidance requires the schedule to include the name of the pass through entity and identifying number assigned by the pass through entity for federal awards received as a subrecipient. Numbers identified as N/AV are not available.
Title: MAJOR PROGRAMS Accounting Policies: A. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. B. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. C. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. D. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the programs Section 8 Housing Choice Vouchers (HCV) and Disaster Grants- Public Assistance. Expenditures for HCV Program are equal to the ACC subsidy for the PHA fiscal period. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. Major programs are identified in the Summary of Auditor’s Results Section of the Schedule of Findings and Questioned Costs.
Title: SCHEDULE NOT IN AGREEMENT WITH OTHER FEDERAL AWARD REPORTING Accounting Policies: A. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. B. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. C. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. D. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the programs Section 8 Housing Choice Vouchers (HCV) and Disaster Grants- Public Assistance. Expenditures for HCV Program are equal to the ACC subsidy for the PHA fiscal period. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The information included in the Schedule may not fully agree with other federal award reports submitted directly to federal granting agencies.
Title: RELATIONSHIPS TO FEDERAL FINANCIAL REPORTS Accounting Policies: A. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. B. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. C. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. D. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the programs Section 8 Housing Choice Vouchers (HCV) and Disaster Grants- Public Assistance. Expenditures for HCV Program are equal to the ACC subsidy for the PHA fiscal period. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. Expenditures of federal awards are reported in the Municipality’s Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Fund as follows: Description General Fund Head Start Fund State Assignmen ts Funds ARPA Fund CDBG Fund FEMA fund Other Governmental Funds Total Total Federal expenditures per Schedule of Expenditures of Federal Awards $ 25,427 $ 5,808,049 $ 750,843 $ 2,221,478 $ 1,087,535 $ 2,028,146 $ 2,728,280 $ 14,649,758 Less: Transfer out to the General Fund to reimburse current year expenditures - - (738,121) - (4,490) ( 200,500) - ( 943,111) Plus: Adjustment to expenditures under modified accrual basis for Section 8 HCV Program - - - - 3 1,923 31,923 Non-federal awards expenditures 9 ,473,037 - 6 62,921 - 1,290,371 11,426,329 $ 9,498,464 $ 5,808,049 $ 675,643 $ 2,221,478 $ 1,083,045 $ 1,827,646 $ 4,050,574 $ 25,164,899
Title: COMMUNITY DISASTER LOANS Accounting Policies: A. The Schedule is prepared from Municipality’s accounting records and presents only a selected portion of the operations of the Municipality, it is not intended to, and does not present, the financial position or changes in net position of the Municipality. B. The Municipality in accordance with the terms and conditions of the grants, records the financial transactions which are consistent with accounting principles generally accepted in the United States of America. C. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable or when actually paid, whichever occurs first. D. Expenditures reported on the Schedule are reported on the modified accrual basis of accounting, except for the programs Section 8 Housing Choice Vouchers (HCV) and Disaster Grants- Public Assistance. Expenditures for HCV Program are equal to the ACC subsidy for the PHA fiscal period. Expenditures for Disaster Grants- Public Assistance are recognized in the period when; (a) FEMA has approved the PW and (b) eligible expenditures are incurred. De Minimis Rate Used: N Rate Explanation: The Municipality has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Municipality is required to identify in the notes to the Schedule of Expenditures of Federal Awards the balances outstanding at the end of the period. Program’s transactions during fiscal year 2023-2024 are as follows: Description Amount Outstanding note balance, at June 30, 2024 $ 0 Current year loan expenditures $ 619,700

Finding Details

Condition: The Municipality submitted to the Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf) five out of twelve reports for the Coronavirus State Fiscal Recovery Funds - Use of Funds Report for all the expenses incurred under the Assistance Program to Municipalities instead of submitting the report on a monthly basis as required by program regulations. Context: The Municipality received $750,843 under the Municipal Strengthening Fund Program during the fiscal year ended on June 30, 2024. The Municipality used $750,843 in program funds to cover expenses related to the public health emergency caused by the Covid-19 pandemic. Criteria: Under the Municipal Strengthening Fund Program, the Municipality must report to the Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf) program expenses for the month, 15 days after the end of the month. Cause: The Municipality did not submit the Use of Funds Report to the Aafaf by the 15th day of the following month; the expenses were incurred. Effect: The Municipality is not in compliance with its grant awards. Auditor’s recommendation: The Municipality should implement internal controls and procedures to assure that the required reports are completed and submitted in a timely manner as per program regulations. Views of Responsible officials and corrective actions: The Finance Director of the Municipality of Sabana Grande submitted 5 out of 12 reports for the Coronavirus State Fiscal Recovery Funds - Use of Funds Reports indicating that there were months with no expenses reported. Even though, the Municipality will be implementing the internal controls and procedures to assure that the required reports are completed and submitted on a monthly basis. Audit Status: Partially Resolved
Condition: The Municipality submitted to the Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf) five out of twelve reports for the Coronavirus State Fiscal Recovery Funds - Use of Funds Report for all the expenses incurred under the Assistance Program to Municipalities instead of submitting the report on a monthly basis as required by program regulations. Context: The Municipality received $750,843 under the Municipal Strengthening Fund Program during the fiscal year ended on June 30, 2024. The Municipality used $750,843 in program funds to cover expenses related to the public health emergency caused by the Covid-19 pandemic. Criteria: Under the Municipal Strengthening Fund Program, the Municipality must report to the Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf) program expenses for the month, 15 days after the end of the month. Cause: The Municipality did not submit the Use of Funds Report to the Aafaf by the 15th day of the following month; the expenses were incurred. Effect: The Municipality is not in compliance with its grant awards. Auditor’s recommendation: The Municipality should implement internal controls and procedures to assure that the required reports are completed and submitted in a timely manner as per program regulations. Views of Responsible officials and corrective actions: The Finance Director of the Municipality of Sabana Grande submitted 5 out of 12 reports for the Coronavirus State Fiscal Recovery Funds - Use of Funds Reports indicating that there were months with no expenses reported. Even though, the Municipality will be implementing the internal controls and procedures to assure that the required reports are completed and submitted on a monthly basis. Audit Status: Partially Resolved