FAC Explorer

Audit 364247

FY End
2023-12-31
Total Expended
$2.85M
Findings
4
Programs
4
Organization: Centro Para La Reconstruccion Del Habitat, Inc. (PR)
Year: 2023 Accepted: 2025-08-14
Auditor: D' Leading Business Solutions INC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
573523 2023-003 Significant Deficiency - L
573524 2023-004 - - P
1149965 2023-003 Significant Deficiency - L
1149966 2023-004 - - P

Programs

ALN Program Spent Major Findings
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $2.71M Yes 2
66.306 Environmental Justice Collaborative Problem-Solving Cooperative Agreement Program $83,088 - 0
10.890 Rural Development Cooperative Agreement Program $33,920 - 0
10.446 Rural Community Development Initiative $21,482 - 0

Contacts

Name Title Type
XY3LGMKFP7M8 Luis Gallardo Auditee
7873966606 Pedro Rivera Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation and Accounting Accounting Policies: The Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activities of the Center for the Reconstruction of the Habitat, Inc. (the “Organization”) and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Federal programs are presented, as appropriate by Federal Agency. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activities of the Center for the Reconstruction of the Habitat, Inc. (the “Organization”) and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Federal programs are presented, as appropriate by Federal Agency.
Title: Matching Costs Accounting Policies: The Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activities of the Center for the Reconstruction of the Habitat, Inc. (the “Organization”) and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Federal programs are presented, as appropriate by Federal Agency. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate Matching costs, such as the nonfederal share of certain program costs, are not included in the accompanying Schedule.
Title: Indirect Costs Accounting Policies: The Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activities of the Center for the Reconstruction of the Habitat, Inc. (the “Organization”) and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Federal programs are presented, as appropriate by Federal Agency. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate The Organization does not have a negotiated indirect cost rate; therefore, the Organization uses the ten percent (10%) “de minimis” indirect cost rate allowed by the Uniform Guidance.
Title: Relation to Federal Financial Reports Accounting Policies: The Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activities of the Center for the Reconstruction of the Habitat, Inc. (the “Organization”) and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Federal programs are presented, as appropriate by Federal Agency. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate The regulations and guidelines governing the preparation of Federal financial reports vary by Federal agency and among programs administered by the same agency. Accordingly, the amounts reported in the Federal financial reports do not necessarily agree with the amounts reported in the accompanying schedule, which is prepared on the basis of accounting described in Note 1. Office of Management and Budget under the Uniform Guidance requires that federal financial reports and claims for advances and reimbursements contain information that is supported by the books and records from which the financial statements have been prepared. The Organization prepares the federal financial reports and claims for reimbursements primarily based on information from the internal accounting records of the Organization
Title: Contingencies Accounting Policies: The Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activities of the Center for the Reconstruction of the Habitat, Inc. (the “Organization”) and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Federal programs are presented, as appropriate by Federal Agency. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate The grant amounts received are subject to audit and adjustment. If any expenditure is disallowed by the grantor agencies as a result of such an audit, any claim for reimbursement to the grantor agencies would become a liability of the Organization. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreements and applicable federal laws and regulations.
Title: RECONCILIATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND TOTAL EXPENSES PER THE FINANCIAL STATEMENTS Accounting Policies: The Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activities of the Center for the Reconstruction of the Habitat, Inc. (the “Organization”) and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Federal programs are presented, as appropriate by Federal Agency. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate See the Notes to the SEFA for chart/table

Finding Details

Finding 2023-003
Agency: U.S. Department of Housing and Urban Development (HUD) Federal Program: Community Development Block Grant – Disaster Recovery (CDBG-DR) Compliance Requirement: Reporting Category: Significant Deficiency and Noncompliance Criteria: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Part 200.512, Report Submission, (a) General, (1) states that the audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after the end of the audit period. Condition: The Organization did not comply with the required due date for the submission of the Single Audit Report Package. The Organization as a non-Federal entity, must have a single audit when it has $750,000 or more in expenditure of federal funds. Cause of Condition: The Organization failed to comply with the requirements stipulated in its Agreement with the PRDH. Even though, the Organization formally contracted a Firm to conduct the Single Audit, the inherent complexity and scope of the process caused significant delays. Effect of Condition: The Organization is considered delinquent in the submission of the Single Audit Report Package and if it does not respond to follow-up procedures from federal agencies, may face sanctions such as: • Draw-Down Restrictions • Reimbursable Draw Down • Withholding a Percentage of Federal Funds • Suspension of Federal Funds • Termination of Grant Questioned Costs: None CENTER FOR THE RECONSTRUCTION OF THE HABITAT, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS - CONTINUED YEAR ENDED DECEMBER 31, 2023 28 Recommendation: The Organization must designate work teams amongst all relevant areas which serve as liaisons with auditors and be responsible for the delivery of information and documentation to ensure compliance with due dates. The Organization should maintain a clear line of communication throughout areas and follow up accordingly to maintain a continuous flow of information during audit procedures. In addition, the Organization should request periodic follow-up meetings with auditors to address any audit issues encountered which may affect meeting established deadlines. Management’s Response: The Organization initially had difficulty identifying a qualified firm to carry out the Single Audit for the year ended December 31, 2023. During the first half of 2024, the Organization contacted a total of 17 firms to request quotes, in a process that proved especially difficult given that many did not have experience auditing Non-Profit entities or did not respond. The Organization also consulted with peer Non-Profits entities with similar budgets to obtain recommendations, and from all these efforts only one proposal was received. This prolonged search process significantly delayed the start of the audit. Nevertheless, the Organization entered into a formal agreement with a certified public accounting (CPA) firm to perform the Single Audit. In addition, as this was the Organization’s first audit, additional time was required to compile the requested documents. With a clear understanding now of the documentation requirements, the process is expected to be significantly quicker in future audits. Furthermore, the Organization has already agreed with the same firm to perform the Single Audit for subsequent years going forward.
Finding 2023-004
Agency: U.S. Department of Housing and Urban Development (HUD) Federal Program: Community Development Block Grant – Disaster Recovery (CDBG-DR) Compliance Requirement: Monitoring Category: Deficiency (D) Criteria: Exhibit A to the Vacant Property Assessment Subrecipient Agreement – Scope of Work, Clause No. 4.2.10 indicates that the Organization must monitor and control team performance in accordance with established performance goals, regulatory compliance, and quality standards. Condition: The Organization did not prepare minutes for its meetings during the year under audit, and through the date the financial statements were available for issuance. Cause of Condition: The Organization discontinued the preparation of minutes prior to year under audit since it is not required by the Organization’s constitution. Effect of Condition: The risk of not following up on operational decisions to achieve performance goal increases. Management may overlook issues for which decisions have been already made. Questioned Costs: None Recommendation: The Organization should prepare minutes to document all its official meetings. Accurate minutes are crucial for documenting key discussions and course of actions, ensuring transparency, and providing a record for external reviews and legal matters. Management’s Response: The Organization documents decisions and the Board votes through corporate resolutions. Nevertheless, to better document the Board’s monitoring and control of team performance, the Organization intends to resume preparing minutes for Board meetings going forward. Meetings are to be held at least once every four months, according to the Organization’s internal regulations.
Finding 2023-003
Agency: U.S. Department of Housing and Urban Development (HUD) Federal Program: Community Development Block Grant – Disaster Recovery (CDBG-DR) Compliance Requirement: Reporting Category: Significant Deficiency and Noncompliance Criteria: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Part 200.512, Report Submission, (a) General, (1) states that the audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report(s), or nine months after the end of the audit period. Condition: The Organization did not comply with the required due date for the submission of the Single Audit Report Package. The Organization as a non-Federal entity, must have a single audit when it has $750,000 or more in expenditure of federal funds. Cause of Condition: The Organization failed to comply with the requirements stipulated in its Agreement with the PRDH. Even though, the Organization formally contracted a Firm to conduct the Single Audit, the inherent complexity and scope of the process caused significant delays. Effect of Condition: The Organization is considered delinquent in the submission of the Single Audit Report Package and if it does not respond to follow-up procedures from federal agencies, may face sanctions such as: • Draw-Down Restrictions • Reimbursable Draw Down • Withholding a Percentage of Federal Funds • Suspension of Federal Funds • Termination of Grant Questioned Costs: None CENTER FOR THE RECONSTRUCTION OF THE HABITAT, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS - CONTINUED YEAR ENDED DECEMBER 31, 2023 28 Recommendation: The Organization must designate work teams amongst all relevant areas which serve as liaisons with auditors and be responsible for the delivery of information and documentation to ensure compliance with due dates. The Organization should maintain a clear line of communication throughout areas and follow up accordingly to maintain a continuous flow of information during audit procedures. In addition, the Organization should request periodic follow-up meetings with auditors to address any audit issues encountered which may affect meeting established deadlines. Management’s Response: The Organization initially had difficulty identifying a qualified firm to carry out the Single Audit for the year ended December 31, 2023. During the first half of 2024, the Organization contacted a total of 17 firms to request quotes, in a process that proved especially difficult given that many did not have experience auditing Non-Profit entities or did not respond. The Organization also consulted with peer Non-Profits entities with similar budgets to obtain recommendations, and from all these efforts only one proposal was received. This prolonged search process significantly delayed the start of the audit. Nevertheless, the Organization entered into a formal agreement with a certified public accounting (CPA) firm to perform the Single Audit. In addition, as this was the Organization’s first audit, additional time was required to compile the requested documents. With a clear understanding now of the documentation requirements, the process is expected to be significantly quicker in future audits. Furthermore, the Organization has already agreed with the same firm to perform the Single Audit for subsequent years going forward.
Finding 2023-004
Agency: U.S. Department of Housing and Urban Development (HUD) Federal Program: Community Development Block Grant – Disaster Recovery (CDBG-DR) Compliance Requirement: Monitoring Category: Deficiency (D) Criteria: Exhibit A to the Vacant Property Assessment Subrecipient Agreement – Scope of Work, Clause No. 4.2.10 indicates that the Organization must monitor and control team performance in accordance with established performance goals, regulatory compliance, and quality standards. Condition: The Organization did not prepare minutes for its meetings during the year under audit, and through the date the financial statements were available for issuance. Cause of Condition: The Organization discontinued the preparation of minutes prior to year under audit since it is not required by the Organization’s constitution. Effect of Condition: The risk of not following up on operational decisions to achieve performance goal increases. Management may overlook issues for which decisions have been already made. Questioned Costs: None Recommendation: The Organization should prepare minutes to document all its official meetings. Accurate minutes are crucial for documenting key discussions and course of actions, ensuring transparency, and providing a record for external reviews and legal matters. Management’s Response: The Organization documents decisions and the Board votes through corporate resolutions. Nevertheless, to better document the Board’s monitoring and control of team performance, the Organization intends to resume preparing minutes for Board meetings going forward. Meetings are to be held at least once every four months, according to the Organization’s internal regulations.