Audit 56665

FY End
2022-06-30
Total Expended
$10.02M
Findings
2
Programs
1
Year: 2022 Accepted: 2023-06-29
Auditor: Galindez LLC

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
58714 2022-001 - - P
635156 2022-001 - - P

Programs

ALN Program Spent Major Findings
66.468 Capitalization Grants for Drinking Water State Revolving Funds $10.02M Yes 1

Contacts

Name Title Type
NMLEHM4JTN15 Lorna E. Alicea Auditee
7877635757 Taireli Hidalgo Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: Summary of significant accounting policiesa. The Schedule is prepared from the Revolving Funds accounting records. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be available or may be limited as to reimbursement.b. The financial transactions are recorded by the Revolving Fund in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America.c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable, or when paid, whichever occurs first. d. The Revolving Fund has elected not to use the 10-percent de minimis indirect costs rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. CAPITALIZATION GRANTS FOR DRINKING WATER STATE REVOLVING FUNDS (66.468) - Balances outstanding at the end of the audit period were 183186045.
Title: Capitalization grants Accounting Policies: Summary of significant accounting policiesa. The Schedule is prepared from the Revolving Funds accounting records. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be available or may be limited as to reimbursement.b. The financial transactions are recorded by the Revolving Fund in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America.c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable, or when paid, whichever occurs first. d. The Revolving Fund has elected not to use the 10-percent de minimis indirect costs rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. During the year ended June 30, 2022, grants and loans disbursed to subrecipient amounted to $11,210,558, of which $9,331,733 were received from the U.S. Environmental Protection Agency (EPA), and $1,878,825 were disbursed from the state loan repayment funds.Grants are not subject to loan or interest charges. The balance of loans previously granted amounting to $183,186,045 is not included in the schedule since the Revolving Fund is not deemed to have continuing compliance with requirements.
Title: Basis of presentation Accounting Policies: Summary of significant accounting policiesa. The Schedule is prepared from the Revolving Funds accounting records. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be available or may be limited as to reimbursement.b. The financial transactions are recorded by the Revolving Fund in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America.c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable, or when paid, whichever occurs first. d. The Revolving Fund has elected not to use the 10-percent de minimis indirect costs rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying supplementary Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of Puerto Rico Safe Drinking Water Treatment Revolving Loan Fund (the Revolving Fund) 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). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, the Revolving Funds financial statements. Because the Schedule presents only a selected portion of the activities of the Revolving Fund, it is not intended to, and does not present the net position, changes in net position, and cash flows of the Revolving Fund.
Title: Assistance Listing Numbers (ALN) Accounting Policies: Summary of significant accounting policiesa. The Schedule is prepared from the Revolving Funds accounting records. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be available or may be limited as to reimbursement.b. The financial transactions are recorded by the Revolving Fund in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America.c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable, or when paid, whichever occurs first. d. The Revolving Fund has elected not to use the 10-percent de minimis indirect costs rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Assistance Listing numbers (ALN) included in the Schedule are determined based on the program name, review of grant contract information and the public descriptions of federal assistance listings published by the U.S. Government on sam.gov. Assistance Listing numbers are presented for those programs for which such numbers were available.
Title: Reconciliation of the Schedule with the statement of revenues, expenses and Accounting Policies: Summary of significant accounting policiesa. The Schedule is prepared from the Revolving Funds accounting records. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures may or may not be available or may be limited as to reimbursement.b. The financial transactions are recorded by the Revolving Fund in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America.c. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable, or when paid, whichever occurs first. d. The Revolving Fund has elected not to use the 10-percent de minimis indirect costs rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The following presents a reconciliation between the Schedule with the contributions received from the EPA as presented in the statement of revenues, expenses and changes in net position: For the year ended on June 30, 2022: AmountExpenditures per Schedule of Expenditures of Federal Awards $ 10,018,852Add: expenditures incurred in prior years but claimed for reimbursement during the year ended on June 30, 2022 440,662Less: expenditures incurred during the year ended June 30, 2022that have not been claimed for reimbursement to the EPA (231,692)Contributions from EPA per statement of revenues, expensesand changes in net position $ 10,227,822

Finding Details

Finding No. 2022-001 Audit Requirements for Auditees ? Report Submission Federal program Drinking Water State Revolving Funds Cluster: ALN 66.468 Capitalization Grants for Drinking Water State Revolving Funds Name of federal agency U.S. Environmental Protection Agency (EPA) Pass-through entity Puerto Rico Department of Health Category Compliance/Internal Control Compliance requirements Other Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), ? 200.512 Report submission (a) (1), ? the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section 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. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day?. Condition found The data collection form and the reporting package for the year ended on June 30, 2022 was not submitted to the Federal Audit Clearinghouse within the timeframe prescribed by the Uniform Guidance. Cause Accounting and reporting processes are being delayed and thus, the information necessary to complete the financial statement audit procedures was not available within the timeframe prescribed by the Uniform Guidance. Effect As a result of this condition, the EPA may issue warnings and/or impose penalties to the Revolving Fund. Also, the EPA was prevented the use of accurate reporting data, which is critical for the effective administration of the federal program and for EPA budgetary policy analysis. Questioned cost None. Context N/A Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Views of responsible officials and planned corrective actions The management of the Revolving Fund agree with this finding. Please refer to the corrective action plan section on page 44. Recommendation The data collection form and single audit package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take the necessary steps to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Revolving Fund?s operations.
Finding No. 2022-001 Audit Requirements for Auditees ? Report Submission Federal program Drinking Water State Revolving Funds Cluster: ALN 66.468 Capitalization Grants for Drinking Water State Revolving Funds Name of federal agency U.S. Environmental Protection Agency (EPA) Pass-through entity Puerto Rico Department of Health Category Compliance/Internal Control Compliance requirements Other Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), ? 200.512 Report submission (a) (1), ? the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section 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. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day?. Condition found The data collection form and the reporting package for the year ended on June 30, 2022 was not submitted to the Federal Audit Clearinghouse within the timeframe prescribed by the Uniform Guidance. Cause Accounting and reporting processes are being delayed and thus, the information necessary to complete the financial statement audit procedures was not available within the timeframe prescribed by the Uniform Guidance. Effect As a result of this condition, the EPA may issue warnings and/or impose penalties to the Revolving Fund. Also, the EPA was prevented the use of accurate reporting data, which is critical for the effective administration of the federal program and for EPA budgetary policy analysis. Questioned cost None. Context N/A Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Views of responsible officials and planned corrective actions The management of the Revolving Fund agree with this finding. Please refer to the corrective action plan section on page 44. Recommendation The data collection form and single audit package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take the necessary steps to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Revolving Fund?s operations.