Audit 350461

FY End
2024-06-30
Total Expended
$9.90M
Findings
4
Programs
11
Year: 2024 Accepted: 2025-03-31

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
540827 2024-001 Significant Deficiency - L
540828 2024-002 Significant Deficiency - L
1117269 2024-001 Significant Deficiency - L
1117270 2024-002 Significant Deficiency - L

Contacts

Name Title Type
MFV5M444Z7C6 Diego Melendez Auditee
7878743040 Janice Roman Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 – 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 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. 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 subrecipient. 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 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 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 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: NOTE 2 – 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 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. 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 subrecipient. 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 has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. 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 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. 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 subrecipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
Title: NOTE 3 – 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 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. 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 subrecipient. 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 has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. The Municipality elected not use the 10% de minimis cost rate, and did not charge indirect cost to federal grants during the year ended June 30, 2024.
Title: NOTE 4 – 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 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. 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 subrecipient. 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 has elected not to use the 10-percent de minimis cost rate allowed under the Uniform Guidance. Amounts reported in the accompanying Schedule are included in the Disaster Grants Fund, ARPA Fund and in the Other Governmental Funds in the Municipality’s fund financial statements. The reconciliation between the expenditures in the fund financial statements and expenditures in the Schedule of Expenditures of Federal Awards is as follows: Total federal expenditures per Schedule of Expenditures of Federal Awards $ 3,295,985 $ 4,178,731 $ 2,425,241 $ 9,899,957 Additional amount recorded as expenditures under modified accrual basis for Section 8 HCV Program - - 1,741 1 ,741 Reimbursement of prior year expenditures (470,461) ( 158,491) - (628,952) Non-federal awards expenditures - - 378,340 378,340 Total expenditures, per fund statements $ 2,825,524 $ 4,020,240 $ 2,805,322 $ 9,651,086

Finding Details

Condition: The Single Audit reporting package, as defined and required in 2 CRF 200.512 for fiscal year ended June 30, 2023, was not submitted timely. Context: Despite the Municipality’s best efforts to provide, on a timely basis, the information needed to complete the audit, data collection form and reporting package according to 2 CRF 200.512, the audit, data collection form and reporting package for the fiscal year ended June 30, 2023 was submitted to the Federal Audit Clearinghouse on May 6, 2024 Criteria: As per 2 CRF 200.512, the audit, data collection form, and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The Municipality was not able to provide on a timely basis, the information needed to complete the audit for the year ended on June 30, 2023. This situation prevented the submission of the data collection form and reporting package by the due date of March 31, 2024. Effect: Because of the situation described above, the Senate did not comply with the report submission requirement, since the audit was not submitted within nine months after their fiscal period end date. Auditor’s recommendation: Management should continue to fulfill their auditee responsibilities as stated in 2 CRF 200.508 which among other things, require management to prepare appropriate financial statements and provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit and to ensure that subsequent financial reporting packages are submitted timely. View of Responsible officials and corrective actions: Management gave instructions to the Finance Department staff to submit, in a timely manner, all the required information, to our external consultants and to our external auditors, in order to comply with the datelines for the submission of the Single Audit Report. Implementation Date: March 31, 2025 Responsible Person: Mr. Diego Meléndez – Finance Department Director
Condition: The Municipality did not submit for our review the Coronavirus State Fiscal Recovery Funds - Use of Funds Report for all the expenses incurred under the Assistance Program to Municipalities as required by program regulations. Context: The Municipality used $930,027 under the Coronavirus State Fiscal Recovery Fund during the fiscal year ended on June 30, 2024, 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 award. Auditor’s recommendation: The Municipality should implement internal controls and procedures to ensure that the required reports are completed and submitted in a timely manner as per program regulations. View of Responsible officials and corrective actions: The Finance Department staff is aware about the compliance requirement, and instructions were given to the accounting staff to maintain a dateline control sheet to ascertain that required reports were submitted within the due date. Responsible Person: Mr. Diego Meléndez – Finance Department Director Implementation Date: Fiscal Year 2024-2025 Audit Status: Unresolved
Condition: The Single Audit reporting package, as defined and required in 2 CRF 200.512 for fiscal year ended June 30, 2023, was not submitted timely. Context: Despite the Municipality’s best efforts to provide, on a timely basis, the information needed to complete the audit, data collection form and reporting package according to 2 CRF 200.512, the audit, data collection form and reporting package for the fiscal year ended June 30, 2023 was submitted to the Federal Audit Clearinghouse on May 6, 2024 Criteria: As per 2 CRF 200.512, the audit, data collection form, and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or nine months after the end of the audit period. Cause: The Municipality was not able to provide on a timely basis, the information needed to complete the audit for the year ended on June 30, 2023. This situation prevented the submission of the data collection form and reporting package by the due date of March 31, 2024. Effect: Because of the situation described above, the Senate did not comply with the report submission requirement, since the audit was not submitted within nine months after their fiscal period end date. Auditor’s recommendation: Management should continue to fulfill their auditee responsibilities as stated in 2 CRF 200.508 which among other things, require management to prepare appropriate financial statements and provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit and to ensure that subsequent financial reporting packages are submitted timely. View of Responsible officials and corrective actions: Management gave instructions to the Finance Department staff to submit, in a timely manner, all the required information, to our external consultants and to our external auditors, in order to comply with the datelines for the submission of the Single Audit Report. Implementation Date: March 31, 2025 Responsible Person: Mr. Diego Meléndez – Finance Department Director
Condition: The Municipality did not submit for our review the Coronavirus State Fiscal Recovery Funds - Use of Funds Report for all the expenses incurred under the Assistance Program to Municipalities as required by program regulations. Context: The Municipality used $930,027 under the Coronavirus State Fiscal Recovery Fund during the fiscal year ended on June 30, 2024, 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 award. Auditor’s recommendation: The Municipality should implement internal controls and procedures to ensure that the required reports are completed and submitted in a timely manner as per program regulations. View of Responsible officials and corrective actions: The Finance Department staff is aware about the compliance requirement, and instructions were given to the accounting staff to maintain a dateline control sheet to ascertain that required reports were submitted within the due date. Responsible Person: Mr. Diego Meléndez – Finance Department Director Implementation Date: Fiscal Year 2024-2025 Audit Status: Unresolved