Criteria
22 CFR § 5.801 Uniform financial reporting standards, (b) (1)
Entities (or individuals) to which this subpart is applicable must provide to HUD
such financial information as required by HUD. Such information must be
provided on a n annual basis, except as required more accordance with Generally
Accepted Accounting Principles as further defined by HUD in supplementary
guidance; (2) Submitted electronically to HUD through the internet, or in such
other electronic format designated by HUD, or in such non-electronic format as
HUD may allow if the burden or cost of electronic reporting is determined by
HUD to the excessive; and (3) Submitted in such form and substance as
prescribed by HUD. Also, on Section (c) (1) the financial information to be
submitted to HUD in accordance with paragraph (b) of this section, must be
submitted to HUD annually, no later than 60 days after the end of the fiscal year
of the reporting period, and as otherwise provided by law. In addition, on Section
(d) (1) states that unaudited financial statements will be required 60 days after the
PHA” s fiscal year end, and audited financial statements will then be required no
later than 9 months after the PHA’s fiscal year end, in accordance with the Single
Audit Act and 2 CFR Part 200, Subpart F.
Condition
The Municipality did not submit the required Financial Reports to the US
Housing and Urban Development for the fiscal year ending June 30, 2024, during
the required period. The unaudited Financial Report was not submitted on or
before August 30, 2024, also, the audited Financial Report was not submitted on
or before March 31, 2025
Questioned Cost
None determined.
Cause
Control procedures were not established to provide on time finance information to
prepare the required financial reports of the Housing and Urban Development.
Effect
The Municipality did not comply with the submission date required for the Financial
Reports to the US Housing and Urban Development; this could affect the continuance
and new approvals of federal program funds.
Recommendation
We recommend the Municipality maintain adequate accounting records related to the
federal funds to properly prepare the financial statements accurately and in a timely
manner. In addition, the Municipality needs to implement adequate internal controls
procedures I order to assure that the supporting documentation is available on a timely
manner. Also, proper training in the accounting system should be obtained by the
personnel in charge of preparing the Federal Financial Reports required by HUD.
Management Response
The Finance Director of the municipality has issued clear and specific instructions to
the director of this area, demanding that she and her team take immediate measures to
ensure that these types of findings are not repeated in future fiscal periods or in the
years to come.
Criteria
2 CFR part 75.512, the Uniform Guidance established the audit must be completed
nine months after the end of audit period and the Single Audit Reporting package
and Data Collection Form (SF-SAC) Federal Audit Clearing House, must be
submitted within the earlier 30 calendar days after receipt of the auditor’s report, or
nine months after the end audit period, whichever comes first.
Condition
Preliminary Financial reports and programs financial information was prepared by
external consultant and were available on June 3, 2025, to prepare the Single Audit
Reporting Package.
Questioned cost
Not determined.
Cause
Control procedures were not established to provide on time finance information to
prepare the Single Audit reporting package.
Effect
The Municipality did not comply with the submission date required for the Data
Collection Form and Reporting Package; this could affect the continuance and new
approvals of federal funds. In addition, for the next two (2) fiscal years the
Municipality cannot be considered by the auditor as a low-risk auditee
Recommendation:
To prepare a calendar responsibility of Federal funds due dates financial statements
to be prepared on time. Adequate training must be provided to finance personnel.
The governing body must create an Audit and Finance Committee to revise monthly
financial statements.
Management response:
The municipal management, especially the Finance Department, is addressing this
situation with the level of responsibility it requires. Therefore, I undertake to
thoroughly evaluate all internal areas involved, as well as the performance of
consulting and auditing firms, with the aim of implementing the necessary
corrections and adjustments to prevent this situation from happening again in the
future.
Criteria Section 75.320 Equipment
CFR pat 75.320 Equipment
Management requirements. Procedures for managing equipment (including
replacement equipment), when in whole or in part under a federal award, until
disposition takes place will, as a minimum, meet some of the following
requirements.
(1) Property records must be maintained that include a description of the property,
a serial number or other identification number, the source of funding for the
property (including the FAIN), who holds title, the acquisition date, and cost
property, percentage of federal participation in the project costs for the federal
award under which the property location, use and condition of the property, and
any ultimate disposition data including the date of disposal and sale price of
property.
(2) A physical inventory of the property must be taken, and the result reconciled
with the property records at least once every two years.
(3) A control system must be developed to ensure adequate safeguards to prevent
loss, damage, or theft of the property. Any loss, damage, or theft shall be
investigated.
Condition
The Municipality did not maintain adequate internal control over property and
equipment. The Municipality did not provide a real and personnel property record
of all the property and equipment acquired this year with federal funds and insurance.
The Municipality does not take an annual audit for real and personnel property. During our
audit the Municipality did not provide a subsidiary of capital assets that agree with the
amounts reported in governmental activities of the Government- Wide Financial Statements.
Cause
The Municipality does not have accurate property records of federal funds to trace
the real and tangible personal property activities that should be reported to federal
funds.
Effect:
The Municipality does not present fairly the financial position of the financial
statements in the Government-Wide Financial Statements.
Questioned cost:
Not determined
Identification of a repeated finding:
None repeating findings were found.
Recommendations:
A control system must be developed to ensure adequate safeguards to prevent loss,
damage, or theft of the property; loss, damage, of theft must be investigated.
Adequate maintenance procedures mut be developed to keep the property in good
condition. The program must identify all properties acquired with federal funds and
maintain adequate accounting records in accordance with federal regulations.
Management Response:
In all monitoring conducted by all required agencies, there have been no indications
of insufficient control over personal and capital properties associated with any of the
state or federal funds. Any clerical errors identified, as mentioned in the
Management Respond of finding 2024-002, will be addressed as a priority prior to
the upcoming audit.
Criteria
22 CFR § 5.801 Uniform financial reporting standards, (b) (1)
Entities (or individuals) to which this subpart is applicable must provide to HUD
such financial information as required by HUD. Such information must be
provided on a n annual basis, except as required more accordance with Generally
Accepted Accounting Principles as further defined by HUD in supplementary
guidance; (2) Submitted electronically to HUD through the internet, or in such
other electronic format designated by HUD, or in such non-electronic format as
HUD may allow if the burden or cost of electronic reporting is determined by
HUD to the excessive; and (3) Submitted in such form and substance as
prescribed by HUD. Also, on Section (c) (1) the financial information to be
submitted to HUD in accordance with paragraph (b) of this section, must be
submitted to HUD annually, no later than 60 days after the end of the fiscal year
of the reporting period, and as otherwise provided by law. In addition, on Section
(d) (1) states that unaudited financial statements will be required 60 days after the
PHA” s fiscal year end, and audited financial statements will then be required no
later than 9 months after the PHA’s fiscal year end, in accordance with the Single
Audit Act and 2 CFR Part 200, Subpart F.
Condition
The Municipality did not submit the required Financial Reports to the US
Housing and Urban Development for the fiscal year ending June 30, 2024, during
the required period. The unaudited Financial Report was not submitted on or
before August 30, 2024, also, the audited Financial Report was not submitted on
or before March 31, 2025
Questioned Cost
None determined.
Cause
Control procedures were not established to provide on time finance information to
prepare the required financial reports of the Housing and Urban Development.
Effect
The Municipality did not comply with the submission date required for the Financial
Reports to the US Housing and Urban Development; this could affect the continuance
and new approvals of federal program funds.
Recommendation
We recommend the Municipality maintain adequate accounting records related to the
federal funds to properly prepare the financial statements accurately and in a timely
manner. In addition, the Municipality needs to implement adequate internal controls
procedures I order to assure that the supporting documentation is available on a timely
manner. Also, proper training in the accounting system should be obtained by the
personnel in charge of preparing the Federal Financial Reports required by HUD.
Management Response
The Finance Director of the municipality has issued clear and specific instructions to
the director of this area, demanding that she and her team take immediate measures to
ensure that these types of findings are not repeated in future fiscal periods or in the
years to come.
Criteria
2 CFR part 75.512, the Uniform Guidance established the audit must be completed
nine months after the end of audit period and the Single Audit Reporting package
and Data Collection Form (SF-SAC) Federal Audit Clearing House, must be
submitted within the earlier 30 calendar days after receipt of the auditor’s report, or
nine months after the end audit period, whichever comes first.
Condition
Preliminary Financial reports and programs financial information was prepared by
external consultant and were available on June 3, 2025, to prepare the Single Audit
Reporting Package.
Questioned cost
Not determined.
Cause
Control procedures were not established to provide on time finance information to
prepare the Single Audit reporting package.
Effect
The Municipality did not comply with the submission date required for the Data
Collection Form and Reporting Package; this could affect the continuance and new
approvals of federal funds. In addition, for the next two (2) fiscal years the
Municipality cannot be considered by the auditor as a low-risk auditee
Recommendation:
To prepare a calendar responsibility of Federal funds due dates financial statements
to be prepared on time. Adequate training must be provided to finance personnel.
The governing body must create an Audit and Finance Committee to revise monthly
financial statements.
Management response:
The municipal management, especially the Finance Department, is addressing this
situation with the level of responsibility it requires. Therefore, I undertake to
thoroughly evaluate all internal areas involved, as well as the performance of
consulting and auditing firms, with the aim of implementing the necessary
corrections and adjustments to prevent this situation from happening again in the
future.
Criteria Section 75.320 Equipment
CFR pat 75.320 Equipment
Management requirements. Procedures for managing equipment (including
replacement equipment), when in whole or in part under a federal award, until
disposition takes place will, as a minimum, meet some of the following
requirements.
(1) Property records must be maintained that include a description of the property,
a serial number or other identification number, the source of funding for the
property (including the FAIN), who holds title, the acquisition date, and cost
property, percentage of federal participation in the project costs for the federal
award under which the property location, use and condition of the property, and
any ultimate disposition data including the date of disposal and sale price of
property.
(2) A physical inventory of the property must be taken, and the result reconciled
with the property records at least once every two years.
(3) A control system must be developed to ensure adequate safeguards to prevent
loss, damage, or theft of the property. Any loss, damage, or theft shall be
investigated.
Condition
The Municipality did not maintain adequate internal control over property and
equipment. The Municipality did not provide a real and personnel property record
of all the property and equipment acquired this year with federal funds and insurance.
The Municipality does not take an annual audit for real and personnel property. During our
audit the Municipality did not provide a subsidiary of capital assets that agree with the
amounts reported in governmental activities of the Government- Wide Financial Statements.
Cause
The Municipality does not have accurate property records of federal funds to trace
the real and tangible personal property activities that should be reported to federal
funds.
Effect:
The Municipality does not present fairly the financial position of the financial
statements in the Government-Wide Financial Statements.
Questioned cost:
Not determined
Identification of a repeated finding:
None repeating findings were found.
Recommendations:
A control system must be developed to ensure adequate safeguards to prevent loss,
damage, or theft of the property; loss, damage, of theft must be investigated.
Adequate maintenance procedures mut be developed to keep the property in good
condition. The program must identify all properties acquired with federal funds and
maintain adequate accounting records in accordance with federal regulations.
Management Response:
In all monitoring conducted by all required agencies, there have been no indications
of insufficient control over personal and capital properties associated with any of the
state or federal funds. Any clerical errors identified, as mentioned in the
Management Respond of finding 2024-002, will be addressed as a priority prior to
the upcoming audit.