Audit 350286

FY End
2024-06-30
Total Expended
$309.17M
Findings
2
Programs
2
Year: 2024 Accepted: 2025-03-29

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
540539 2024-001 Significant Deficiency Yes L
1116981 2024-001 Significant Deficiency Yes L

Programs

ALN Program Spent Major Findings
14.288 Community Development Block Grant - Disaster Recovery $305.65M Yes 1
14.239 Home Investment Partnerships Program $3.52M - 0

Contacts

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

Notes to SEFA

Title: Schedule Not in Agreement with Other Federal Awards Reporting Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Puerto Rico Housing Finance Authority (the Authority) and is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Authority's government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, which conform to accounting principles generally accepted in the United States of America. The accounts of the Authority are presented based on funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred inflows, liabilities, and deferred outflows, fund balance/net position, revenues, and expenditures/expenses. Government resources are allocated to and accounted for by individual funds based upon the purposes for which they are to be spent and how spending activities are controlled. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles, wherein certain types of expenditures are not allowable or are limited to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A The information included in the Schedule may not fully agree with other federal awards reports, submitted directly to the federal grantor agency because, among other reasons, the award report may (a) be prepared for a different fiscal period and (b) include cumulative data (from prior years) rather than data from the current year only.
Title: Assistance Listing Number Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Puerto Rico Housing Finance Authority (the Authority) and is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Authority's government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, which conform to accounting principles generally accepted in the United States of America. The accounts of the Authority are presented based on funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred inflows, liabilities, and deferred outflows, fund balance/net position, revenues, and expenditures/expenses. Government resources are allocated to and accounted for by individual funds based upon the purposes for which they are to be spent and how spending activities are controlled. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles, wherein certain types of expenditures are not allowable or are limited to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A The Assistance Listing Number is a program identification number presented for programs in which such numbers are available. The first two digits identify the federal department or agency that administers the program, and the last three numbers are assigned by numerical sequence.
Title: Relationship to the Financial Statements Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Puerto Rico Housing Finance Authority (the Authority) and is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Authority's government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, which conform to accounting principles generally accepted in the United States of America. The accounts of the Authority are presented based on funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred inflows, liabilities, and deferred outflows, fund balance/net position, revenues, and expenditures/expenses. Government resources are allocated to and accounted for by individual funds based upon the purposes for which they are to be spent and how spending activities are controlled. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles, wherein certain types of expenditures are not allowable or are limited to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A A reconciliation of total expenditures related to federal programs included in the statement of revenues, expenditures, and changes in fund balances - governmental funds and the statement of revenues, expenses, and changes in net position – proprietary funds to total expenditures included in the schedule of expenditures of federal awards is as follows: Major Funds: HUD Programs $ 147,722,015 HOME Programs 3,516580 Community Development Block Grant - Disaster Recovery 305,651,387 Less: Performance Based Contract Administrator Program (ALN 14.327) excluded from coverage under Uniform Guidance 147,722,015 Total expenditures in schedule of expenditures of federal awards $ 309,167,967
Title: Pass Trough Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Puerto Rico Housing Finance Authority (the Authority) and is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Authority's government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, which conform to accounting principles generally accepted in the United States of America. The accounts of the Authority are presented based on funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred inflows, liabilities, and deferred outflows, fund balance/net position, revenues, and expenditures/expenses. Government resources are allocated to and accounted for by individual funds based upon the purposes for which they are to be spent and how spending activities are controlled. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles, wherein certain types of expenditures are not allowable or are limited to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A No federal grant dollar has been passed through to sub-recipient.
Title: Subsequent Event Accounting Policies: Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Puerto Rico Housing Finance Authority (the Authority) and is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Authority's government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, which conform to accounting principles generally accepted in the United States of America. The accounts of the Authority are presented based on funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred inflows, liabilities, and deferred outflows, fund balance/net position, revenues, and expenditures/expenses. Government resources are allocated to and accounted for by individual funds based upon the purposes for which they are to be spent and how spending activities are controlled. Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of expendable resources, as well as balances of expendable resources available at the end of the fiscal year. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, Cost Principles, wherein certain types of expenditures are not allowable or are limited to reimbursement. De Minimis Rate Used: N Rate Explanation: N/A On January 27, 2025, the OMB of the United States Federal Government instituted a pause (freeze) on the disbursement of federal grant and loan funds, which became effective on January 28, 2025. The extent to which the funding freeze impacts our operations, financial results, and cash flows, both current and future, will depend on future developments, which are highly uncertain and cannot be predicted with any measure of certainty or probability.

Finding Details

Name of Federal Agency US Department of Housing and Urban Development (HUD) Pass-through the Puerto Rico Housing Department Federal Program 14.288 Community Development Block Grant - Disaster Recovery Category Compliance / Internal control Compliance Requirements Reporting Criteria Uniform Guidance, Part 200.329 (c)(i) established that the non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes. Reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. As per agreement with the Authority clause II (b) established that the Authority shall submit regular monthly progress reports to the Puerto Rico Department of Housing (PRDOH), on the form and with the content to be specified and required by the PRDOH. The PRDOH will later notify the Authority in writing the guidelines and requirements applicable to the submittal of the monthly progress reports, and such notification shall be deemed incorporated by reference to this Agreement. This clause is in accordance with the guidance of the Subrecipient Guide. Condition During our procedures performed to determine compliance with reporting requirements, we noted that the Progress Report was not submitted on time to Puerto Rico Department of Housing (PRDOH). Cause and Potential Effect Noncompliance with the reporting requirements could lead to significant administrative actions by the grantor, including a reduction in the amounts to be awarded. In addition, it prevents the grantor from monitoring the performance of the program and could be interpreted as a failure to achieve program objectives. Questioned Costs None Recommendation The Authority shall ensure effective supervision over its reporting processes to guarantee the timely preparation and submission of progress reports. It is advised that the Authority prioritize providing comprehensive training to personnel responsible for preparing, reviewing, and approving performance reports. This training should focus on equipping them with the necessary skills and knowledge to include all relevant data elements and adhere to deadlines consistently. Views of responsible officials: Pursuant to the Subrecipient Agreement, on July 2, 2020, the Authority became the administrator of the Program. However, it wasn’t until June 1, 2021, when the Authority formed the Division, which consists of a team of employees designated to administer and implement the Program, and its priorities include ensuring that all Program requirements are being met. This includes submitting the Progress Reports that were past due before the Division’s formation and making sure that all future reports are submitted on time. Since then, the Division has been submitting the Progress Reports on time and is currently up to date. Moreover, the following measures have been taken to ensure compliance with this requirement: 1. On October of 2021, the Progress Reports began to be submitted electronically through the Grant Compliance Portal (GCP), making this process more efficient and faster. 2. The staff members responsible for submitting the Progress Reports are given frequent training on the report’s requirements and the GCP usage. 3. The Division continues to recruit additional personnel as needed. Therefore, the Program is currently in compliance with the Progress Reports submittal and the issues that might have caused any delays in submitting such reports before the Division’s formation were addressed. Responsible Person: Mrs. Janet Pérez / Mrs. Sheila Hernández
Name of Federal Agency US Department of Housing and Urban Development (HUD) Pass-through the Puerto Rico Housing Department Federal Program 14.288 Community Development Block Grant - Disaster Recovery Category Compliance / Internal control Compliance Requirements Reporting Criteria Uniform Guidance, Part 200.329 (c)(i) established that the non-Federal entity must submit performance reports at the interval required by the Federal awarding agency or pass-through entity to best inform improvements in program outcomes and productivity. Intervals must be no less frequent than annually nor more frequent than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes. Reports submitted annually by the non-Federal entity and/or pass-through entity must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. Alternatively, the Federal awarding agency or pass-through entity may require annual reports before the anniversary dates of multiple year Federal awards. As per agreement with the Authority clause II (b) established that the Authority shall submit regular monthly progress reports to the Puerto Rico Department of Housing (PRDOH), on the form and with the content to be specified and required by the PRDOH. The PRDOH will later notify the Authority in writing the guidelines and requirements applicable to the submittal of the monthly progress reports, and such notification shall be deemed incorporated by reference to this Agreement. This clause is in accordance with the guidance of the Subrecipient Guide. Condition During our procedures performed to determine compliance with reporting requirements, we noted that the Progress Report was not submitted on time to Puerto Rico Department of Housing (PRDOH). Cause and Potential Effect Noncompliance with the reporting requirements could lead to significant administrative actions by the grantor, including a reduction in the amounts to be awarded. In addition, it prevents the grantor from monitoring the performance of the program and could be interpreted as a failure to achieve program objectives. Questioned Costs None Recommendation The Authority shall ensure effective supervision over its reporting processes to guarantee the timely preparation and submission of progress reports. It is advised that the Authority prioritize providing comprehensive training to personnel responsible for preparing, reviewing, and approving performance reports. This training should focus on equipping them with the necessary skills and knowledge to include all relevant data elements and adhere to deadlines consistently. Views of responsible officials: Pursuant to the Subrecipient Agreement, on July 2, 2020, the Authority became the administrator of the Program. However, it wasn’t until June 1, 2021, when the Authority formed the Division, which consists of a team of employees designated to administer and implement the Program, and its priorities include ensuring that all Program requirements are being met. This includes submitting the Progress Reports that were past due before the Division’s formation and making sure that all future reports are submitted on time. Since then, the Division has been submitting the Progress Reports on time and is currently up to date. Moreover, the following measures have been taken to ensure compliance with this requirement: 1. On October of 2021, the Progress Reports began to be submitted electronically through the Grant Compliance Portal (GCP), making this process more efficient and faster. 2. The staff members responsible for submitting the Progress Reports are given frequent training on the report’s requirements and the GCP usage. 3. The Division continues to recruit additional personnel as needed. Therefore, the Program is currently in compliance with the Progress Reports submittal and the issues that might have caused any delays in submitting such reports before the Division’s formation were addressed. Responsible Person: Mrs. Janet Pérez / Mrs. Sheila Hernández