FAC Explorer

Audit 373080

FY End
2023-09-30
Total Expended
$3.05M
Findings
1
Programs
2
Organization: Pohnpei Utilities Corporation (FM)
Year: 2023 Accepted: 2025-12-04
Auditor: 660826885

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1163470 2023-003 Material Weakness Yes LN

Programs

ALN Program Spent Major Findings
10.859 ASSISTANCE TO HIGH ENERGY COST RURAL COMMUNITIES $2.67M Yes 1
15.875 ECONOMIC, SOCIAL, AND POLITICAL DEVELOPMENT OF THE TERRITORIES $376,131 Yes 0

Contacts

Name Title Type
GFAQFD173V35 Daisy Nanpei Auditee
6913205021 Karvin L. Flynn Auditor
No contacts on file

Notes to SEFA

Pohnpei Utilities Corporation (PUC) is a component unit of the Government of the State of Pohnpei. PUC commenced operations on October 1, 1991, with assets and liabilities of the Division of Public Utilities of the Pohnpei State Department of Public Works transferred as of that date. Only the activities of PUC are included in the scope of the Single Audit.
The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of PUC under programs of the federal government for the year ended September 30, 2023. The information in this 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). Because the Schedule presents only a selected portion of the operations of PUC, it is not intended to and does not present the financial position or changes in financial position of PUC.
Expenditures reported on the Schedule are reported on the accrual basis of accounting, consistent with the manner in which PUC maintains its accounting records, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. All expenses and capital outlays are reported as expenditures when incurred. Pass-through entity identifying numbers are presented where available.
PUC elected not to use the 10 percent de minimis indirect cost rate as covered in 2 CFR §200.414 of the Uniform Guidance. PUC did not receive any indirect cost allocation and no indirect costs were recorded against any federal program reported on the accompanying Schedule of Expenditures of Federal Awards for the year ended September 30, 2023.

Finding Details

Finding 2023-003
Finding 2023-003 Federal Agency: U.S Department of Agriculture AL Program: 10.859 Assistance to High Energy Cost Rural Communities Federal Award No: HCEG FM001-B84 Area: Special Tests and Provisions Questioned Costs: $0 Criteria: Section 8.8, Final Project Report, of the underlying grant agreement requires the grantee to provide the Rural Utilities Service (RUS) with a final project report detailing: project performance, final project expenditures, and one full year of operating data. Such data must include energy produced, fuel savings, and/or cost savings associated with the project, and community benefits. The report must demonstrate whether the performance objectives listed in the grant application were achieved, including: 1. A reduction in per unit cost of power by $0.01 – 0.02/kWh. 2. An additional 188 kW of energy for available waste heat, equating to 1.61 MW of additional renewable energy annually. 3. A quantified decrease in the number of blackouts experienced over the prior year. Condition: PUC submitted a final project report to RUS that included project performance information, expenditures, and operating data; however, the report covered only four (4) months of operating data. The submission did not include the required one full year of operating data. No adverse or corrective feedback was issued by the awarding agency regarding the submission. Cause: PUC management did not establish procedures to ensure that all required operating data covering a full twelve-month period was collected and reported prior to submission. Effect: PUC is in noncompliance with the special tests and provisions requirements of the grant agreement. Although no questioned costs were identified, incomplete reporting may limit RUS’s ability to fully assess whether the project achieved its intended performance objectives. Recommendation: We recommend that PUC implement internal controls to ensure compliance with all reporting requirements under its federal awards, including: 1. Establishing procedures to track required reporting timelines and data periods. 2. Assigning responsibility for the compilation of complete annual operating data prior to submission. 3. Reviewing future submissions for compliance with the full scope of grant reporting criteria before transmittal to the awarding agency. Identification as a Repeat Finding: N/A View of Responsible Officials: PUC’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.