FAC Explorer

Audit 39093

FY End
2022-06-30
Total Expended
$5.16M
Findings
4
Programs
10
Organization: Municipality of Catano (PR)
Year: 2022 Accepted: 2023-03-28
Auditor: Lopez Vega CPA Psc

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
41892 2022-003 Significant Deficiency - L
41893 2022-002 Significant Deficiency Yes L
618334 2022-003 Significant Deficiency - L
618335 2022-002 Significant Deficiency Yes L

Programs

ALN Program Spent Major Findings
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $555,393 - 0
21.019 Coronavirus Relief Fund $220,610 Yes 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $147,136 - 0
93.575 Child Care and Development Block Grant $130,089 - 0
20.600 State and Community Highway Safety $78,195 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $71,696 Yes 1
10.558 Child and Adult Care Food Program $48,734 - 0
97.030 Community Disaster Loans $33,540 - 0
66.818 Brownfields Assessment and Cleanup Cooperative Agreements $33,281 - 0
93.569 Community Services Block Grant $9,505 - 0

Contacts

Name Title Type
JB9YLJZMNP73 Maria D. Perez Ramos Auditee
7877880404 Angel A. Lopez Vega Auditor
No contacts on file

Notes to SEFA

Title: ASSISTANCE LISTING NUMBER AND PASS-THROUGH ENTITY IDENTIFYING NUMBER Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the Municipality under programs of the federal government for the year ended June 30, 2022. 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). Therefore, some amounts presented in this schedule may differ from the amounts presented in, or used in the preparation of, the basic financial statements. Because the schedule presents only a selected portion of the operations of the Municipality, it is not intended to and does not present the financial position and changes in net assets of the Municipality.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:?Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.?Loan or loan 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 auditee did not use the de minimis cost rate. The Assistance Listing Number (ALN), formerly known as the Catalog of Federal Domestic Assistance (CFDA) Number, is a five-digit number assigned in the awarding document for a federal assistance award mechanism, including federal grants and cooperative agreements. Assistance listings are detailed public descriptions of federal programs that provide grants, loans, scholarships, insurance, and other types of assistance awards. The SAM.gov assistance listing is the publicly available online database showing all available Federally-funded programs.State or local government redistributions of federal awards to the Municipality, known as passthrough 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 passthrough entity and the identifying number assigned by the pass-through entity for the federal awards received as a subrecipient. Numbers identified as N/A are not applicable and numbers identified as N/AV are not available.
Title: ASSISTANCE LISTING NUMBER 21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVER Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the Municipality under programs of the federal government for the year ended June 30, 2022. 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). Therefore, some amounts presented in this schedule may differ from the amounts presented in, or used in the preparation of, the basic financial statements. Because the schedule presents only a selected portion of the operations of the Municipality, it is not intended to and does not present the financial position and changes in net assets of the Municipality.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:?Public assistance grants (FEMA). Expenditures are recognized in the period when: (1) FEMA has approved the PW, and (2) eligible expenditures are incurred.?Loan or loan 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 auditee did not use the de minimis cost rate. On March 11, 2021, was signed into law the American Rescue Plan Act (ARPA) of 2021, the latest COVID-19 stimulus package. Within ARPA, the Coronavirus State and Local Fiscal Recovery Fund provides $350 billion for states, municipalities, counties, tribes, and territories, including $130.2 billion for local governments split evenly between municipalities and counties. The Municipality of Cata?o started receiving the funds and incurring in expenditures on fiscal year 2021-2022.

Finding Details

Finding 2022-003
Finding Reference: 2022-003 Federal Agency: U.S. Department of the Treasury Pass-through Agency: Puerto Rico Fiscal Agency and Financial Advisory Authority Program: Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing No. 21.027) Compliance Requirement: Reporting ? Special Reporting (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) Statement of Condition: During the fiscal year, the Municipality administered funds from the Coronavirus State and Local Fiscal Recovery Funds, this allocation was granted directly from the Federal government and through Puerto Rico Fiscal Agency and Financial Advisory Authority, respectively. In our Reporting Test, we found that the Municipality did not comply with the monthly compliance reporting requirements established by the Puerto Rico Fiscal Agency and Financial Advisory Authority. Also, the Municipality reported as expense the amounts obligated, instead of the amounts accrued. Criteria: The Municipal Strengthening Fund Transfer Agreement, Clause 5.1, states that the Transferee shall submit reports as the Transferor determines are needed to verify use of the funds and compliance with conditions that are imposed on the Transfer, and such reports shall be in such form, with such content, as specified by the Transferor in the Transfer Plan and future program instructions directed to all Recipients. The Transfer Plan, on Exhibit A, establishes that starting on the 15th day of the month following receipt of the funds, and by the 15th day of each month, the Transferee will submit a Use of Funds Report for the prior month?s expenses. Also, on the Municipal Strengthening Fund Program Guidelines, the Puerto Rico Fiscal Agency and Financial Advisory Authority specified on the Reporting Requirements Section that the recipients are required to submit monthly financial reports using the reporting template provided by the program. During the fiscal year 2021-2022, in addition to the contract agreement with the Puerto Rico Fiscal Agency and Financial Advisory Authority, the Municipality signed an agreement with the US Department of Treasury to receive funds direct funds as a Non-entitlement and County Unit. Those transfer agreements also established reporting requirements that we determined that the Municipality was in compliance. Cause of Condition: There is a lack of knowledge and training to personnel assigned. Additionally, the Municipality does not have an adequate monitoring for the activity and the reports. Effect of Condition: The program is not in compliance with the Reporting Requirements as established in agreement. Recommendation: We recommend training for the authorized personnel who administer the program, to better understand the reporting requirements and develop complete and accurate reports. The Municipality should establish a monitoring system to ensure compliance with requirements established by the pass-through agency such as: submitting the reports during the 15th day of each month, where the fund expenses of the previous month will be reported as incurred. This will ensure better control for the program. Questioned Cost: None. Views of Responsible Officials and Planned Corrective Action: We concur with the finding. The Municipality has taken corrective measures for faithful compliance with the established reporting dates. Training and supervision of compliance personnel for this program or any other required funds will be reinforced.
Finding 2022-002
Finding Reference: 2022-002 Federal Agency: U.S. Department of the Treasury Pass-through Agency: Puerto Rico Fiscal Agency and Financial Advisory Authority & Puerto Rico Department of Health Program: Coronavirus Relief Fund (Assistance Listing No. 21.019) Compliance Requirement: Reporting ? Special Reporting (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding(s) 2021-003. Statement of Condition: During the fiscal year the Municipality administered funds from the Coronavirus Relief Program, this allocation was granted through two government agencies, Puerto Rico Fiscal Agency and Financial Advisory Authority & Puerto Rico Department of Health, respectively. In our Reporting Test, we found that the Municipality did not comply with the monthly compliance reporting requirements established by the Department of Health. Criteria: The Transfer Agreements, Clause 5.1, the transferee shall submit reports as the transferor determines are needed to verify use of the funds and compliance with conditions that are imposed on the transfer, and such reports shall be in such form, with such content, as specified by the transferor in the transfer plan and future program instructions directed to all recipients. Transferor will transfer emergency assistance fund to transferee for necessary expenditures related to the COVID-19 emergency by making a transfer on the basis set out in this Agreement and in the Transfer Plan attached as Exhibit A. The reports must be due on the 15th day of each month, the transferee will submit a use of funds transfer report for the prior month?s expenses. Cause of Condition: There is a lack of knowledge and training to personal assigned. Additionally, the Municipality does not have an adequate monitoring for the activity and the reports. Effect of Condition: The program is not in compliance with the Reporting Requirements as established in agreement. Recommendation: We recommend training for the authorized personnel to work with the program where they can understand and know how to develop the required reports by the pass-through agency. Also, the Municipality should establish a monitoring system to ensure compliance with established requirements, such as: submit the reports during the 15th day of each month, where the fund expenses of the previous month will be reported. This will ensure better control for the program. Questioned Cost: None. Views of Responsible Officials and Planned Corrective Action: We concur with the finding. The Municipality has taken corrective measures for faithful compliance with the established reporting dates. Compliance oversight will be strengthened for this program or any other required funds.
Finding 2022-003
Finding Reference: 2022-003 Federal Agency: U.S. Department of the Treasury Pass-through Agency: Puerto Rico Fiscal Agency and Financial Advisory Authority Program: Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing No. 21.027) Compliance Requirement: Reporting ? Special Reporting (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) Statement of Condition: During the fiscal year, the Municipality administered funds from the Coronavirus State and Local Fiscal Recovery Funds, this allocation was granted directly from the Federal government and through Puerto Rico Fiscal Agency and Financial Advisory Authority, respectively. In our Reporting Test, we found that the Municipality did not comply with the monthly compliance reporting requirements established by the Puerto Rico Fiscal Agency and Financial Advisory Authority. Also, the Municipality reported as expense the amounts obligated, instead of the amounts accrued. Criteria: The Municipal Strengthening Fund Transfer Agreement, Clause 5.1, states that the Transferee shall submit reports as the Transferor determines are needed to verify use of the funds and compliance with conditions that are imposed on the Transfer, and such reports shall be in such form, with such content, as specified by the Transferor in the Transfer Plan and future program instructions directed to all Recipients. The Transfer Plan, on Exhibit A, establishes that starting on the 15th day of the month following receipt of the funds, and by the 15th day of each month, the Transferee will submit a Use of Funds Report for the prior month?s expenses. Also, on the Municipal Strengthening Fund Program Guidelines, the Puerto Rico Fiscal Agency and Financial Advisory Authority specified on the Reporting Requirements Section that the recipients are required to submit monthly financial reports using the reporting template provided by the program. During the fiscal year 2021-2022, in addition to the contract agreement with the Puerto Rico Fiscal Agency and Financial Advisory Authority, the Municipality signed an agreement with the US Department of Treasury to receive funds direct funds as a Non-entitlement and County Unit. Those transfer agreements also established reporting requirements that we determined that the Municipality was in compliance. Cause of Condition: There is a lack of knowledge and training to personnel assigned. Additionally, the Municipality does not have an adequate monitoring for the activity and the reports. Effect of Condition: The program is not in compliance with the Reporting Requirements as established in agreement. Recommendation: We recommend training for the authorized personnel who administer the program, to better understand the reporting requirements and develop complete and accurate reports. The Municipality should establish a monitoring system to ensure compliance with requirements established by the pass-through agency such as: submitting the reports during the 15th day of each month, where the fund expenses of the previous month will be reported as incurred. This will ensure better control for the program. Questioned Cost: None. Views of Responsible Officials and Planned Corrective Action: We concur with the finding. The Municipality has taken corrective measures for faithful compliance with the established reporting dates. Training and supervision of compliance personnel for this program or any other required funds will be reinforced.
Finding 2022-002
Finding Reference: 2022-002 Federal Agency: U.S. Department of the Treasury Pass-through Agency: Puerto Rico Fiscal Agency and Financial Advisory Authority & Puerto Rico Department of Health Program: Coronavirus Relief Fund (Assistance Listing No. 21.019) Compliance Requirement: Reporting ? Special Reporting (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding(s) 2021-003. Statement of Condition: During the fiscal year the Municipality administered funds from the Coronavirus Relief Program, this allocation was granted through two government agencies, Puerto Rico Fiscal Agency and Financial Advisory Authority & Puerto Rico Department of Health, respectively. In our Reporting Test, we found that the Municipality did not comply with the monthly compliance reporting requirements established by the Department of Health. Criteria: The Transfer Agreements, Clause 5.1, the transferee shall submit reports as the transferor determines are needed to verify use of the funds and compliance with conditions that are imposed on the transfer, and such reports shall be in such form, with such content, as specified by the transferor in the transfer plan and future program instructions directed to all recipients. Transferor will transfer emergency assistance fund to transferee for necessary expenditures related to the COVID-19 emergency by making a transfer on the basis set out in this Agreement and in the Transfer Plan attached as Exhibit A. The reports must be due on the 15th day of each month, the transferee will submit a use of funds transfer report for the prior month?s expenses. Cause of Condition: There is a lack of knowledge and training to personal assigned. Additionally, the Municipality does not have an adequate monitoring for the activity and the reports. Effect of Condition: The program is not in compliance with the Reporting Requirements as established in agreement. Recommendation: We recommend training for the authorized personnel to work with the program where they can understand and know how to develop the required reports by the pass-through agency. Also, the Municipality should establish a monitoring system to ensure compliance with established requirements, such as: submit the reports during the 15th day of each month, where the fund expenses of the previous month will be reported. This will ensure better control for the program. Questioned Cost: None. Views of Responsible Officials and Planned Corrective Action: We concur with the finding. The Municipality has taken corrective measures for faithful compliance with the established reporting dates. Compliance oversight will be strengthened for this program or any other required funds.