Audit 676

We compared the amount of grants awarded as per the Administrative and Performance Reports submitted to the PRDOH with the amount reported in the Schedule of Expenditures and Federal Awards, and noted that the Bank did not implement procedures to validate and / or reconcile the amounts as presented in the Administrative and Performance Reports with the balances as per the Bank’s accounting records.

We noted that in two (2) cases, representing 1.65% of the total sample, the Business Applicants did not support physical damages nor economic losses and consequently do not qualify for the grant award. Total awarded grants to these business applicants amounted in the aggregate to $66,308. From a total of 213 awarded grants for which closeout procedures were completed during the year ended June 30, 2022, in the amount of $9,522,108, we selected twenty-five (25) cases, in the total amount of $1,228,590, and noted in one (1) case, representing a 4% of the total sample, the required three (3) quotes were not obtained from the Business Applicant in the aggregate amount of $39,433. During our audit procedures, we got knowledge that one (1) Business Applicant obtained two grant awards in the aggregate amount of $96,630, under two different applications.

From a total of 1,484 SBF Program Recovery Grants (the grants) awarded to business applicants during the year ended June 30, 2022, in the amount of $64,654,049, we performed various compliance tests and noted the following situations: • During our audit procedures, we got knowledge that one (1) Business Applicant obtained two (2) grant awards in the aggregate amount of $96,630, under two different applications. • We selected a sample of 121 grants awarded in the total amount of $5,301,329, to verify if the Business Applicant qualifies for the grant award under physical damages or economic losses, as required by the program’s guidelines. We noted that in two (2) cases, representing 1.65% of the total sample, the Business Applicants did not support physical damages nor economic losses and consequently do not qualify for the grant award. Total grants awarded to these business applicants amounted in the aggregate to $66,308. • We selected a sample of sixty-six (66) grants awarded as follows: twenty-seven (27) grants awarded for working capital purposes and thirty-nine (39) grants awarded for the purchase of equipment, in the total amount of $2,839,563 and noted the following situations: - For the grants awarded for equipment, we reviewed the supporting documentation for required quotes and noted that in thirteen (13) cases, or 33%, some quotes provided by the Business Applicants did not have a date and in one (1) case, or 0.03%, the quotes provided by the Business Applicant did not have a date nor supplier name. - We recomputed the amount of the grant awarded, and noted that in three (3) cases, representing 5% of the total sample, the amount of award was computed incorrectly. The amount of over payment in the aggregate was $1,150. - We noted in one (1) case, representing 2% of the total sample, that the Bank did not require to the Business Applicant evidence about the percent (%) that represents the sales of alcohol of the total Business’ sales. From a total of 213 grants awarded for which closeout procedures were completed during the year ended June 30, 2022, in the amount of $9,522,108, we selected twenty-five (25) cases, in the total amount of $1,178,590, and noted in one (1) case, representing a 4% of the total sample, the required three (3) quotes were not obtained from the Business Applicant in the aggregate amount of $39,433.

• Reporting For the year ended June 30, 2022, we compared the amount of grants awarded as per the Administrative and Performance Reports submitted to the PRDOH with the amount reported in the Schedule of Expenditures and Federal Awards, and noted that the Bank did not implement procedures to validate and / or reconcile the amounts as presented in the Administrative and Performance Reports with the balances as per the Bank’s accounting records. • Accounting Records In relation to the CDBG-DR Fund, although disbursements are recorded in a separate fund, the Bank does not present, on a monthly basis, the revenues, expenses, assets, and liabilities in the Bank’s general ledger. Instead, the Bank is recording the transactions as revenues, expenses, assets, and liabilities related to the CDBG-DR fund at year end. The CDBG-DR fund activity is monitored in another system that is maintained parallel to the Bank’s general ledger. This additional system is used for reporting process but is not monitored and reconciled jointly with the Bank’s general ledger. Entity level controls related to monthly approvals, reconciliations, actual versus budget comparisons, and other financial reporting controls are performed in another system that does not make automatic interface with the Bank’s general ledger.

From a total of 1,484 SBF Program Recovery Grants (the grants) awarded to business applicants during the year ended June 30, 2022, in the amount of $64,654,049, we selected a sample of sixty-six (66) grants awarded, in the total amount of $2,839,563, to verify compliance with environmental reviews requirements and noted that in one (1) case, representing 2% of the sample, the Environmental Review Report was signed by the Business Applicant after the Grant Award Agreement’s date.

The Single Audit Report of the Bank for the fiscal year ended June 30, 2022, was not submitted on or before March 31, 2023, as required by the Uniform Guidance. The Single Audit related to such period was completed after the 9 months deadline.

We compared the amount of grants awarded as per the Administrative and Performance Reports submitted to the PRDOH with the amount reported in the Schedule of Expenditures and Federal Awards, and noted that the Bank did not implement procedures to validate and / or reconcile the amounts as presented in the Administrative and Performance Reports with the balances as per the Bank’s accounting records.

We noted that in two (2) cases, representing 1.65% of the total sample, the Business Applicants did not support physical damages nor economic losses and consequently do not qualify for the grant award. Total awarded grants to these business applicants amounted in the aggregate to $66,308. From a total of 213 awarded grants for which closeout procedures were completed during the year ended June 30, 2022, in the amount of $9,522,108, we selected twenty-five (25) cases, in the total amount of $1,228,590, and noted in one (1) case, representing a 4% of the total sample, the required three (3) quotes were not obtained from the Business Applicant in the aggregate amount of $39,433. During our audit procedures, we got knowledge that one (1) Business Applicant obtained two grant awards in the aggregate amount of $96,630, under two different applications.

From a total of 1,484 SBF Program Recovery Grants (the grants) awarded to business applicants during the year ended June 30, 2022, in the amount of $64,654,049, we performed various compliance tests and noted the following situations: • During our audit procedures, we got knowledge that one (1) Business Applicant obtained two (2) grant awards in the aggregate amount of $96,630, under two different applications. • We selected a sample of 121 grants awarded in the total amount of $5,301,329, to verify if the Business Applicant qualifies for the grant award under physical damages or economic losses, as required by the program’s guidelines. We noted that in two (2) cases, representing 1.65% of the total sample, the Business Applicants did not support physical damages nor economic losses and consequently do not qualify for the grant award. Total grants awarded to these business applicants amounted in the aggregate to $66,308. • We selected a sample of sixty-six (66) grants awarded as follows: twenty-seven (27) grants awarded for working capital purposes and thirty-nine (39) grants awarded for the purchase of equipment, in the total amount of $2,839,563 and noted the following situations: - For the grants awarded for equipment, we reviewed the supporting documentation for required quotes and noted that in thirteen (13) cases, or 33%, some quotes provided by the Business Applicants did not have a date and in one (1) case, or 0.03%, the quotes provided by the Business Applicant did not have a date nor supplier name. - We recomputed the amount of the grant awarded, and noted that in three (3) cases, representing 5% of the total sample, the amount of award was computed incorrectly. The amount of over payment in the aggregate was $1,150. - We noted in one (1) case, representing 2% of the total sample, that the Bank did not require to the Business Applicant evidence about the percent (%) that represents the sales of alcohol of the total Business’ sales. From a total of 213 grants awarded for which closeout procedures were completed during the year ended June 30, 2022, in the amount of $9,522,108, we selected twenty-five (25) cases, in the total amount of $1,178,590, and noted in one (1) case, representing a 4% of the total sample, the required three (3) quotes were not obtained from the Business Applicant in the aggregate amount of $39,433.

• Reporting For the year ended June 30, 2022, we compared the amount of grants awarded as per the Administrative and Performance Reports submitted to the PRDOH with the amount reported in the Schedule of Expenditures and Federal Awards, and noted that the Bank did not implement procedures to validate and / or reconcile the amounts as presented in the Administrative and Performance Reports with the balances as per the Bank’s accounting records. • Accounting Records In relation to the CDBG-DR Fund, although disbursements are recorded in a separate fund, the Bank does not present, on a monthly basis, the revenues, expenses, assets, and liabilities in the Bank’s general ledger. Instead, the Bank is recording the transactions as revenues, expenses, assets, and liabilities related to the CDBG-DR fund at year end. The CDBG-DR fund activity is monitored in another system that is maintained parallel to the Bank’s general ledger. This additional system is used for reporting process but is not monitored and reconciled jointly with the Bank’s general ledger. Entity level controls related to monthly approvals, reconciliations, actual versus budget comparisons, and other financial reporting controls are performed in another system that does not make automatic interface with the Bank’s general ledger.

From a total of 1,484 SBF Program Recovery Grants (the grants) awarded to business applicants during the year ended June 30, 2022, in the amount of $64,654,049, we selected a sample of sixty-six (66) grants awarded, in the total amount of $2,839,563, to verify compliance with environmental reviews requirements and noted that in one (1) case, representing 2% of the sample, the Environmental Review Report was signed by the Business Applicant after the Grant Award Agreement’s date.

The Single Audit Report of the Bank for the fiscal year ended June 30, 2022, was not submitted on or before March 31, 2023, as required by the Uniform Guidance. The Single Audit related to such period was completed after the 9 months deadline.