FAC Explorer

Audit 351725

FY End
2024-06-30
Total Expended
$26.57M
Findings
18
Programs
13
Organization: Municipality of Coamo (PR)
Year: 2024 Accepted: 2025-03-31
Auditor: Lopez Vega CPA Psc

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
547514 2024-003 Significant Deficiency Yes F
547515 2024-003 Significant Deficiency Yes F
547516 2024-003 Significant Deficiency Yes F
547517 2024-004 Significant Deficiency Yes A
547518 2024-004 Significant Deficiency Yes A
547519 2024-004 Significant Deficiency Yes A
547520 2024-005 Significant Deficiency - G
547521 2024-006 Significant Deficiency - L
547522 2024-007 Significant Deficiency - N
1123956 2024-003 Significant Deficiency Yes F
1123957 2024-003 Significant Deficiency Yes F
1123958 2024-003 Significant Deficiency Yes F
1123959 2024-004 Significant Deficiency Yes A
1123960 2024-004 Significant Deficiency Yes A
1123961 2024-004 Significant Deficiency Yes A
1123962 2024-005 Significant Deficiency - G
1123963 2024-006 Significant Deficiency - L
1123964 2024-007 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $12.98M Yes 0
97.030 Community Disaster Loans $1.98M - 0
84.287 Twenty-First Century Community Learning Centers $1.14M - 0
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $1.07M Yes 2
93.575 Child Care and Development Block Grant $956,383 Yes 2
93.044 Special Programs for the Aging, Title Iii, Part B, Grants for Supportive Services and Senior Centers $379,562 - 0
14.871 Section 8 Housing Choice Vouchers $352,595 Yes 1
10.558 Child and Adult Care Food Program $246,386 - 0
20.509 Formula Grants for Rural Areas and Tribal Transit Program $84,117 - 0
93.591 Family Violence Prevention and Services/state Domestic Violence Coalitions $73,267 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $58,148 Yes 0
10.433 Rural Housing Preservation Grants $30,629 - 0
97.039 Hazard Mitigation Grant $20,370 - 0

Contacts

Name Title Type
ZL22NTKMG9X3 Hector Sanjurjo Auditee
7872357488 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. 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 the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures 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. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds 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 (“the Schedule”) 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 Regulation (CFR 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 position 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. 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 the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures 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. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds 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 reported on the Schedule are reported on the modified accrual basis of accounting. 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 the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures 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. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds are incurred.
Title: ASSISTANCE LISTING NUMBER Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. 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 the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures 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. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds 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 Number, 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. 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 COST RATE Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. 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 the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures 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. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds 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: MAJOR PROGRAMS Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. 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 the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures 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. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds 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 Auditors’ Results Section of the Schedule of Findings and Questioned Costs.
Title: SUBRECIPIENTS Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. 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 the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures 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. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds 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. During fiscal year 2023-2024, there were no awards passed through to sub-recipients.
Title: COMMUNITY DISASTER LOANS PROGRAM (ALN 97.030) Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. 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 the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures 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. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds 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 Community Disaster Loan (CDL) provide assistance to local governments to overcome a loss in revenues as a result of a natural disaster, in order to perform its governmental operational functions. Neither principal nor interest payments are required until maturity. The terms of the loan provide that if the municipality has not recovered sufficiently to meet its operating budget after three full fiscal years, repayment of all or part of the loan may be cancelled. The principal balance at June 30, 2024, was $3,397,999. Federal statutes and regulations do not impose continuing compliance requirements on the outstanding balance of the loan, other than the repayment of the loan. Therefore, the outstanding balance of the loan is not included in the face of the SEFA. Program transactions during 2023-2024 year are as follows: Description Amount Outstanding note balance, at beginning of year $ 3,397,999 Note advances received during fiscal year 2023-2024 - Note repayment during fiscal year 2023-2024 - Total outstanding note balance, June 30, 2024 $ 3,397,999 Current year loan expenditures $ 1,976,617 Unspent loan proceeds, as of June 30, 2024 $ 290,671
Title: RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. 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 the following programs are recognized based on other unique requirements: • Section 8 Housing Choice Voucher Program (HCV): Expenditures 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. • Public assistance grants (FEMA): Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred. • Loans or loans guarantee programs: Expenditures equal the value of new loans made or received during the audit period plus the beginning of the audit period balance of outstanding loans from previous years for which the federal government imposes continuing compliance requirements. For loans with no imposed continuing compliance requirements, expenditures are recognized when the related costs financed with loan proceeds 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. Amounts reported in the accompanying Schedule are included in the Special Revenue Fund - Federal Grants, and in the Other Nonmajor Funds in the Municipality's fund financial statements. The reconciliation between the expenditures in the fund financial statements and the expenditures in the Schedule of Expenditures of Federal Awards is as follows: Description General Fund Special Revenue Fund - Federal Grants Special Revenue Fund – State and Local Grants Capital Project Fund – State and Local Grants Other Nonmajor Funds Total Per Schedule of Expenditures of Federal Awards $ - $ 26,217,019 $ - $ - $ 352,595 $ 26,569,614 Nonfederal programs expenditures and other adjustments 8,979,779 - 2,760,587 4,721,321 1,879,928 18.341.615 Total expenditures in the fund financial statements $ 8,979,779 $ 26,217,019 $ 2,760,587 $ 4,721,321 $ 2,232,523 $ 44,911,229

Finding Details

Finding 2024-003
Finding Reference 2024-003 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Federal Program: Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Requirement: Equipment and Real Property Management (F) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Criteria: CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided. Cause of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Effect of Condition: We could not identify the property acquired with CDBG funds to realize the proper evaluation as required. Recommendation: Section II – Financial Statements Findings – Finding Reference 2024-002. Questioned Costs: None. Prior Year Finding: This finding is similar to prior year finding 2021-003, 2022-003 and 2023-003. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. As expressed in the corrective action related to Finding 2024-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness. Implementation Date: June 30, 2025 Responsible Person: Mrs. Miraisa David Esparra Finance Department Director
Finding 2024-003
Finding Reference 2024-003 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Federal Program: Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Requirement: Equipment and Real Property Management (F) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Criteria: CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided. Cause of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Effect of Condition: We could not identify the property acquired with CDBG funds to realize the proper evaluation as required. Recommendation: Section II – Financial Statements Findings – Finding Reference 2024-002. Questioned Costs: None. Prior Year Finding: This finding is similar to prior year finding 2021-003, 2022-003 and 2023-003. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. As expressed in the corrective action related to Finding 2024-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness. Implementation Date: June 30, 2025 Responsible Person: Mrs. Miraisa David Esparra Finance Department Director
Finding 2024-003
Finding Reference 2024-003 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Federal Program: Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Requirement: Equipment and Real Property Management (F) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Criteria: CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided. Cause of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Effect of Condition: We could not identify the property acquired with CDBG funds to realize the proper evaluation as required. Recommendation: Section II – Financial Statements Findings – Finding Reference 2024-002. Questioned Costs: None. Prior Year Finding: This finding is similar to prior year finding 2021-003, 2022-003 and 2023-003. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. As expressed in the corrective action related to Finding 2024-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness. Implementation Date: June 30, 2025 Responsible Person: Mrs. Miraisa David Esparra Finance Department Director
Finding 2024-004
Finding Reference 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Compliance Requirement: Activities Allowed – Housekeepers activity (A) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: We examined four (4) files of housekeeper program participants and found the following exceptions: a) The Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide. b) The monthly evaluation of the work carried out by the housekeeper was not carried out. Criteria: 24 CFR, Section 570.484 states that the Municipality must ensure that the program funds benefit very low, low and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program requirements for housekeeper activities. Cause of Condition: The Municipality’s controls and procedures failed to ensure that the participant’s files include all the required documents to comply with the Program requirements. Effect of Condition: The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide. Recommendation: We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it. Questioned Cost: None. Prior Year Finding: This finding is similar to prior year finding 2023-005.  Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-004
Finding Reference 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Compliance Requirement: Activities Allowed – Housekeepers activity (A) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: We examined four (4) files of housekeeper program participants and found the following exceptions: a) The Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide. b) The monthly evaluation of the work carried out by the housekeeper was not carried out. Criteria: 24 CFR, Section 570.484 states that the Municipality must ensure that the program funds benefit very low, low and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program requirements for housekeeper activities. Cause of Condition: The Municipality’s controls and procedures failed to ensure that the participant’s files include all the required documents to comply with the Program requirements. Effect of Condition: The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide. Recommendation: We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it. Questioned Cost: None. Prior Year Finding: This finding is similar to prior year finding 2023-005.  Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-004
Finding Reference 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Compliance Requirement: Activities Allowed – Housekeepers activity (A) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: We examined four (4) files of housekeeper program participants and found the following exceptions: a) The Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide. b) The monthly evaluation of the work carried out by the housekeeper was not carried out. Criteria: 24 CFR, Section 570.484 states that the Municipality must ensure that the program funds benefit very low, low and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program requirements for housekeeper activities. Cause of Condition: The Municipality’s controls and procedures failed to ensure that the participant’s files include all the required documents to comply with the Program requirements. Effect of Condition: The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide. Recommendation: We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it. Questioned Cost: None. Prior Year Finding: This finding is similar to prior year finding 2023-005.  Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-005
Finding Reference 2024-005 Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: P.R. Department of Family Federal Program: Child Care and Development Block Grant (ALN 93.575) Requirement: Earmarking (G) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) 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 that 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. 45CFR, Subpart F, Section 95.50 (e) states that not less than 70 percent of the Mandatory and Federal and State share of Matching Funds shall be used to meet the child care need of families. 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. Prior Year Finding: No. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. The Program budget was determined and approved by the Pass-through Grantor. We are going to discuss the condition reported with the Pass-through Grantor to obtain an explanation about the matter referenced above. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-006
Finding Reference 2024-006 Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: P.R. Department of Family Federal Program: Child Care and Development Block Grant (ALN 93.575) Requirement: Reporting (L) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: During our audit procedures, we observed that the Program submitted the partial closing report and final closure report (CC-006) after the date established as agreed in the contract with the agency. Criteria: The contract agreement states in Clause thirteen (13) that the Municipality is responsible for the presentation of the trial balance and annual partial closing report fifteen (15) calendar days after the end of the contract. Ninety (90) days after, the Municipality should liquidate all obligations and present to the pass-through entity the final annual closing report (CC-006). Cause of Condition: The Program does not have effective internal controls to ensure that the required reports and supporting documentation are submitted to the pass-through agency in the requested time frame. Effect of Condition: The Program is not in compliance with the Reporting Requirements. Recommendation: We recommend that the Municipality maintain constant monitoring and updating to achieve better control of the program. The reports must be presented as established in the agreement. This will ensure compliance with reporting requirements under the Child Care and Development Block Grant agreement. Questioned Cost: None. Prior Year Finding: No. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the submission of financial information according to applicable requirements. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-007
Finding Reference 2024-007 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Federal Program: Section 8 Housing Choice Vouchers (ALN 14.871) Requirement: Special Tests and Provisions (N) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: During our audit procedures, we observed that the Program does not meet the requirements of annual and quality control inspections. Criteria: 24CFR, Subpart I, Section 982.405 (c) the PHA must conduct supervisory quality control HQS inspections. Also, the Administrative Plan, chapter 10 establishes that HUD requires the Department to inspect each unit under lease at least once every 24 months to confirm that the unit still meets HQS. The inspection may be conducted in conjunction with the family's annual reexamination but also may be conducted separately. According to the plan, the Municipality will conduct inspections every twelve months. In the same chapter, HUD requires that a sample of units be re-inspected by a supervisor or other qualified individual to ensure that HQS are being enforced correctly and uniformly by all inspectors. Cause of Condition: The personnel in charge did not comply with the annual and quality inspections. In addition, the program does not have adequate follow-up for compliance with the requirements. Effect of Condition: The Program is not in compliance with 24CFR, Subpart I, Section 982.405 (c) and Administrative Plan. Recommendation: We recommend that the Municipality monitor the program to ensure that proper inspections are being conducted. This will ensure compliance with the requirements under the Section 8 Housing Choice Vouchers. Questioned Cost: None. Prior Year Finding: No.   Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the execution of supervisory quality control HQS inspections, as required by the program regulations. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-003
Finding Reference 2024-003 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Federal Program: Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Requirement: Equipment and Real Property Management (F) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Criteria: CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided. Cause of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Effect of Condition: We could not identify the property acquired with CDBG funds to realize the proper evaluation as required. Recommendation: Section II – Financial Statements Findings – Finding Reference 2024-002. Questioned Costs: None. Prior Year Finding: This finding is similar to prior year finding 2021-003, 2022-003 and 2023-003. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. As expressed in the corrective action related to Finding 2024-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness. Implementation Date: June 30, 2025 Responsible Person: Mrs. Miraisa David Esparra Finance Department Director
Finding 2024-003
Finding Reference 2024-003 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Federal Program: Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Requirement: Equipment and Real Property Management (F) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Criteria: CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided. Cause of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Effect of Condition: We could not identify the property acquired with CDBG funds to realize the proper evaluation as required. Recommendation: Section II – Financial Statements Findings – Finding Reference 2024-002. Questioned Costs: None. Prior Year Finding: This finding is similar to prior year finding 2021-003, 2022-003 and 2023-003. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. As expressed in the corrective action related to Finding 2024-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness. Implementation Date: June 30, 2025 Responsible Person: Mrs. Miraisa David Esparra Finance Department Director
Finding 2024-003
Finding Reference 2024-003 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Federal Program: Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Requirement: Equipment and Real Property Management (F) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Criteria: CFR 570.505 Use of Real Property - The standards described in this section apply to real property within the recipient's control which was acquired or improved in whole or in part using CDBG funds in excess of $25,000. These standards shall apply from the date CDBG funds are first spent for the property until five years after closeout of an entitlement recipient's participation in the entitlement CDBG program or, with respect to other recipients, until five years after the closeout of the grant from which the assistance to the property was provided. Cause of Condition: Section II – Financial Statements Findings – Finding Reference 2024-002. Effect of Condition: We could not identify the property acquired with CDBG funds to realize the proper evaluation as required. Recommendation: Section II – Financial Statements Findings – Finding Reference 2024-002. Questioned Costs: None. Prior Year Finding: This finding is similar to prior year finding 2021-003, 2022-003 and 2023-003. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. As expressed in the corrective action related to Finding 2024-002, we are going to identify budgetary resources to engage another staff to work with the capital assets subsidiary ledger completeness. Implementation Date: June 30, 2025 Responsible Person: Mrs. Miraisa David Esparra Finance Department Director
Finding 2024-004
Finding Reference 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Compliance Requirement: Activities Allowed – Housekeepers activity (A) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: We examined four (4) files of housekeeper program participants and found the following exceptions: a) The Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide. b) The monthly evaluation of the work carried out by the housekeeper was not carried out. Criteria: 24 CFR, Section 570.484 states that the Municipality must ensure that the program funds benefit very low, low and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program requirements for housekeeper activities. Cause of Condition: The Municipality’s controls and procedures failed to ensure that the participant’s files include all the required documents to comply with the Program requirements. Effect of Condition: The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide. Recommendation: We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it. Questioned Cost: None. Prior Year Finding: This finding is similar to prior year finding 2023-005.  Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-004
Finding Reference 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Compliance Requirement: Activities Allowed – Housekeepers activity (A) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: We examined four (4) files of housekeeper program participants and found the following exceptions: a) The Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide. b) The monthly evaluation of the work carried out by the housekeeper was not carried out. Criteria: 24 CFR, Section 570.484 states that the Municipality must ensure that the program funds benefit very low, low and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program requirements for housekeeper activities. Cause of Condition: The Municipality’s controls and procedures failed to ensure that the participant’s files include all the required documents to comply with the Program requirements. Effect of Condition: The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide. Recommendation: We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it. Questioned Cost: None. Prior Year Finding: This finding is similar to prior year finding 2023-005.  Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-004
Finding Reference 2024-004 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Program: Community Development Block Grant/State’s Program and Non-Entitlement Grants in Hawaii (Assistance Listing No. 14.228) Compliance Requirement: Activities Allowed – Housekeepers activity (A) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: We examined four (4) files of housekeeper program participants and found the following exceptions: a) The Program staff did not visit at least twice per month the participant’s housing unit to ensure the quality of services, according to the activity procedures guide. b) The monthly evaluation of the work carried out by the housekeeper was not carried out. Criteria: 24 CFR, Section 570.484 states that the Municipality must ensure that the program funds benefit very low, low and moderate-income persons and retain documentation justifying its certification. Also, the Municipality has an operational guide approved by its pass-through agency, P.R. Housing Department where it is established all procedures and program requirements for housekeeper activities. Cause of Condition: The Municipality’s controls and procedures failed to ensure that the participant’s files include all the required documents to comply with the Program requirements. Effect of Condition: The Municipality is not in compliance with the Code of Federal Regulations 24, Section 570.484 and with the operational guide. Recommendation: We recommend management follow the procedures established by the P.R. Department of Housing in the procedures manual, including the use of the forms included in it. Questioned Cost: None. Prior Year Finding: This finding is similar to prior year finding 2023-005.  Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. The housekeepers project financed with COVID19-CDBG funds was administered to serve eligible participants within the municipality’s territorial limits. But we gave instructions to the Program Director to assure full compliance with the program guides, including the completeness and submission of any applicable form, and to visit participants housing units as required by the program guide. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-005
Finding Reference 2024-005 Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: P.R. Department of Family Federal Program: Child Care and Development Block Grant (ALN 93.575) Requirement: Earmarking (G) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) 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 that 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. 45CFR, Subpart F, Section 95.50 (e) states that not less than 70 percent of the Mandatory and Federal and State share of Matching Funds shall be used to meet the child care need of families. 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. Prior Year Finding: No. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. The Program budget was determined and approved by the Pass-through Grantor. We are going to discuss the condition reported with the Pass-through Grantor to obtain an explanation about the matter referenced above. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-006
Finding Reference 2024-006 Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: P.R. Department of Family Federal Program: Child Care and Development Block Grant (ALN 93.575) Requirement: Reporting (L) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: During our audit procedures, we observed that the Program submitted the partial closing report and final closure report (CC-006) after the date established as agreed in the contract with the agency. Criteria: The contract agreement states in Clause thirteen (13) that the Municipality is responsible for the presentation of the trial balance and annual partial closing report fifteen (15) calendar days after the end of the contract. Ninety (90) days after, the Municipality should liquidate all obligations and present to the pass-through entity the final annual closing report (CC-006). Cause of Condition: The Program does not have effective internal controls to ensure that the required reports and supporting documentation are submitted to the pass-through agency in the requested time frame. Effect of Condition: The Program is not in compliance with the Reporting Requirements. Recommendation: We recommend that the Municipality maintain constant monitoring and updating to achieve better control of the program. The reports must be presented as established in the agreement. This will ensure compliance with reporting requirements under the Child Care and Development Block Grant agreement. Questioned Cost: None. Prior Year Finding: No. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the submission of financial information according to applicable requirements. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director
Finding 2024-007
Finding Reference 2024-007 Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agency: P.R. Department of Housing Federal Program: Section 8 Housing Choice Vouchers (ALN 14.871) Requirement: Special Tests and Provisions (N) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) Statement of Condition: During our audit procedures, we observed that the Program does not meet the requirements of annual and quality control inspections. Criteria: 24CFR, Subpart I, Section 982.405 (c) the PHA must conduct supervisory quality control HQS inspections. Also, the Administrative Plan, chapter 10 establishes that HUD requires the Department to inspect each unit under lease at least once every 24 months to confirm that the unit still meets HQS. The inspection may be conducted in conjunction with the family's annual reexamination but also may be conducted separately. According to the plan, the Municipality will conduct inspections every twelve months. In the same chapter, HUD requires that a sample of units be re-inspected by a supervisor or other qualified individual to ensure that HQS are being enforced correctly and uniformly by all inspectors. Cause of Condition: The personnel in charge did not comply with the annual and quality inspections. In addition, the program does not have adequate follow-up for compliance with the requirements. Effect of Condition: The Program is not in compliance with 24CFR, Subpart I, Section 982.405 (c) and Administrative Plan. Recommendation: We recommend that the Municipality monitor the program to ensure that proper inspections are being conducted. This will ensure compliance with the requirements under the Section 8 Housing Choice Vouchers. Questioned Cost: None. Prior Year Finding: No.   Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. Instructions were given to the Program staff to strengthen existing internal controls and procedures to ensure the execution of supervisory quality control HQS inspections, as required by the program regulations. Implementation Date: March 31, 2025 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director