Audit 415037

Criteria: OMB Uniform Guidance subpart B .200(a) establishes that Non-Federal entities that expend $500,000 ($750,000 for fiscal years ending after December 25, 2015) or more in a year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with the provisions of this part. Condition: During our audit of June 30, 2021 financial statements, we noted that single audit report for fiscal year 2020-2021 was not submitted by September 30, 2022. Cause: Lack of internal controls over financial reporting to produce financial statements on timely basis to comply with OMB reporting deadlines. Effect: Non-compliance with the above-mentioned requirement could lead to administrative actions by the grantor. It could also be interpreted as a failure to manage federal awards in compliance with laws, regulations, and provisions of contracts and grant agreements. Recommendation: To improve, execute and monitor accounting periods end closings as planned in order to get a financial statement on time to comply with the deadlines required. Also, keep track and communication of federal programs compliances with regulatory parties and among Authority responsible departments involve and establish a program deadline calendar. Questioned Costs: NonePerspective of the information: Single audit report was issued after due date. The information was not drawn from a statistical sample. Prior Year Finding: Yes. Management response: Due to government closures that occurred during the pandemic it was impossible to obtain external and internal information to comply with established requirements. Responsible Officer: Mr. José R. González De la Vega Estimated Completion Date: To work it on or before July 2026.

Criteria: As per § 200.328 Financial reporting. Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMBapproved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting informationCondition: During the audit, we noted differences between quarterly reports’ amounts submitted to grantee agency and expense amounts accrued during the year.Cause: Missing of supporting documentation and underlying data. Effect: Wrong reported amounts could significantly affect program outcomes. Recommendation: To keep, document, file and trace supporting data to support quarterly reports Questioned Costs: None Perspective of the information: The information was not drawn from a statistical sample. Prior Year Finding: No Management response: A specialized funds firm was hired that is working on internal controls to improve the method of accounting of federal funds that meet accounting and FEMA requirements. Responsible Officer: Mr. José R. González De la Vega Estimated Completion Date: To work it on or before July 2026.

Criteria: § 200.502 CFR determines basis for determining Federal awards expended: (a) The determination of when a federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity related to the Federal award pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as:(1) Expenditure/expense transactions associated with grants, cooperative agreements, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, and direct appropriations;(2) The disbursement of funds to subrecipients;(3) The use of loan proceeds under loan and loan guarantee programs;(4) The receipt of property (including surplus property); (5) The receipt or use of program income;(6) The distribution or use of food commodities; (7) The disbursement of amounts entitling the non-Federal entity to an interest subsidy; and (8) The period when insurance is in force. Condition: The Authority had to revise 2021 SEFA report, for expenditures that were to be claimed on private insurance as insurance claims. These claims did not constitute federals expenditures. After a thorough analysis, it was determined that the amount of $2,307,659 was covered by claims from the agency’s property insurance for damage caused by hurricanes and earthquakes, as follows: Previously reported $ 4,040,610 Adjustment 2,307, 659 Adjusted expenditures $ 1,732,951 Cause: The complexities of private insurance coverage effect over FEMA expenditures caused errors in the amounts to be reported as federal expenditures. Effect: Amounts of FEMA federal expenditure reported in the previously reported SEFA were misstatedManagement response: The condition occurred due to the absence of a formalized reconciliation procedure to identify third-party reimbursements (e.g., insurance recoveries) prior to the compilation of federal expenditures reported in the SEFA. Corrective Measures, internal Control Enhancement, the Authority has revised its SEFA preparation procedures to incorporate a formal reconciliation process between General Ledger federal expenditures, Third-party reimbursement records (including insurance recoveries), and Federal award financial reports. This reconciliation will be documented, reviewed by supervisory personnel within the Comptroller’s Office, and retained as part of the SEFA supporting documentation in accordance with record retention requirements under Uniform Guidance. Training and Capacity Development: Personnel responsible for grants accounting and SEFA preparation will complete additional training on 2 CFR Part 200 (Uniform Guidance), FEMA cost eligibility and documentation requirements, Identification and treatment of non-federal offsets to federal expenditures. Responsable Officer: Mr. José R. González De la Vega Estimated Completion Date: To work it on or before July 2026. Recommendation: To improve information and communication controls with FEMA authorities about the identification of amounts to be reported in SEFA. Questioned Costs: None Perspective of the information: The information was not drawn from statistical sample. Prior Year Finding: No