FAC Explorer

Finding 1055695 (2023-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-07-24
Audit: 315825
Organization: Puerto Rico Safe Drinking Water Treatment Revolving Loan Fund (PR)
Auditor: Aquino De Cordova LLC

AI Summary

  • Core Issue: The PRDH lacks effective internal controls and has incomplete accounting procedures, leading to delays in financial reporting and potential errors.
  • Impacted Requirements: Compliance with federal financial management standards, including timely reconciliations and accurate reporting of grant funds.
  • Recommended Follow-Up: PRDH should enhance accounting practices, implement new software, and provide training to staff to improve financial reporting by October 2024.

Finding Text

Criteria 45 CFR, Part 74, Subpart C, Section 74.21; 7 CFR, Part 3016, Subpart C, Section 3016.20 establishes the following: a) A State must expend and account for grant funds in accordance with State Laws and procedures for expending and accounting for its own funds. Fiscal control and accounting procedures of the State, as well as its sub-grantees and cost-type contractors, must be sufficient to: 1. Allow preparation of reports required by this part and the statutes authorizing the grant, and 2. Allow the tracing of funds to a level of expenditure adequate to establish that such funds have not been used in violation of the restrictions and prohibitions of applicable statutes. b) The financial management systems of the grantees and sub-grantees must meet the following standards: 1. Financial reporting - Accurate, current, and complete disclosure of the financial results of financially assisted activities must be made in accordance with the financial reporting requirements of the grant or sub-grant. 2. Accounting records - Grantees and sub-grantees must maintain records that adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or sub-grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures and income.3. Internal control - Effective control and accountability must be maintained for all grant and sub-grant cash, real and personal property, and other assets. Grantees and sub-grantees must adequately safeguard all such property and must ensure that it is used solely for authorized purposes. 4. Budget control - Actual expenditures or outlays must be compared with budgeted amounts for each grant or sub-grant. Financia1 information must be related to performance or productivity data including the development of unit cost information whenever appropriate or specifically required in the grant or sub_x0002_grant agreement. If unit cost data are required, estimates based on available documentation will be accepted, whenever possible. s. Source documentation - Accounting records must be supported by such source documentation as cancelled checks, paid bills, payrolls, time and attendance records contract and sub-grant award documents, etc. During our audit procedures for the fiscal year ended June 30, 2023, we noted the following deficiencies related with the accounting procedures and financial reporting practices of the PRDH: a) The PRDH has inappropriate and/or incomplete cut-off procedures, as well as incomplete month-end and year-end reconciliation and closing procedures which prevent the timely processing of adjustments. Many transactions and adjustments are posted months after the applicable closing with a retroactive effect due to delays in the processing of information, especially those related to payroll transactions. b) During our audit procedures related to compliance with the reporting requirements, we noted that the Finance Department does not reconcile on a timely basis the accounting transactions recorded in their system with the ubsidiary ledger and reports prepared by the federal programs administration. Cause PRDH management has not implemented effective internal controls to ensure a reliable accounting system to accurately account for funds administered. Also, is caused by the lack of analysis of financial transactions recorded during the fiscal year and the lack of monitoring and supervision by the PRDH's management. Effect The PRDH is unable to prepare accurate and complete financial reports on a timely basis. Due to significant reconciliation efforts, report may contain significant errors that may pass undetected. Questioned Costs NonePerspective Information Finding represents a significant problem. The Department of Health must plan to improve accounting and financial reporting practices. Prior Year Audit Finding 2022-001 Recommendation PRDH should evaluate their current accounting and financial reporting software to ensure that the PRDH maximizes its use, establishment or revision of policies and procedures, establishment of periodic reconciliation and analysis of accounting transactions and additional training to accounting personnel related to accounting and financial reporting matters, including year-end closing procedures. Views of Responsible Officials The PRDOH agrees with the finding. However, PRDOH has implemented various corrective actions. Regarding Project Costing Module, the PRDOH already has implemented the Travel and Expenses Module, Payment Management System, which integrates with the Account Receivable to streamline revenue records and Payroll Solutions. The effectiveness of these will be observed during the fiscal year 2024-2025. Also, the PRDOH and Central Government are currently working on ERP implementation in all Government Agencies. This new ERP will be in place in the fiscal year 2024-2025. Furthermore, the PRDOH has established control in order for all program to ensure the timely performed reconciliations between the finance office, the federal affair office, this procedure has started since august 2022. In the other hand the State Department of Treasury has begun a series of training with regard the new ERP that will, be in place by October 2024. This new system in order to close the monthly period all programs will need to reconcile first before closing of the period. Responsible Officials Mrs. Velmary Martinez Y ace Finance Director Mrs. Mayra Reyes Accounting Office Supervisor Estimated Completion Date Tel. 787-765-2929 ext. 3291 Tel. 787-765-2929 ext. 3294 Implementation is expected to be completed on or before the end of October 2024.

Categories

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 479252 2023-001
    Material Weakness Repeat
  • 479253 2023-001
    Material Weakness Repeat
  • 479254 2023-001
    Material Weakness Repeat
  • 479255 2023-001
    Material Weakness Repeat
  • 479256 2023-001
    Material Weakness Repeat
  • 479257 2023-001
    Material Weakness Repeat
  • 479258 2023-001
    Material Weakness Repeat
  • 479259 2023-001
    Material Weakness Repeat
  • 479260 2023-001
    Material Weakness Repeat
  • 479261 2023-001
    Material Weakness Repeat
  • 479262 2023-001
    Material Weakness Repeat
  • 479263 2023-001
    Material Weakness Repeat
  • 479264 2023-002
    Significant Deficiency Repeat
  • 479265 2023-002
    Significant Deficiency Repeat
  • 479266 2023-002
    Significant Deficiency Repeat
  • 479267 2023-002
    Significant Deficiency Repeat
  • 479268 2023-002
    Significant Deficiency Repeat
  • 479269 2023-002
    Significant Deficiency Repeat
  • 479270 2023-002
    Significant Deficiency Repeat
  • 479271 2023-002
    Significant Deficiency Repeat
  • 479272 2023-002
    Significant Deficiency Repeat
  • 479273 2023-002
    Significant Deficiency Repeat
  • 479274 2023-002
    Significant Deficiency Repeat
  • 479275 2023-002
    Significant Deficiency Repeat
  • 479276 2023-003
    Material Weakness
  • 479277 2023-003
    Material Weakness
  • 479278 2023-004
    Material Weakness Repeat
  • 479279 2023-005
    Material Weakness Repeat
  • 479280 2023-005
    Material Weakness Repeat
  • 479281 2023-005
    Material Weakness Repeat
  • 479282 2023-006
    Material Weakness Repeat
  • 479283 2023-006
    Material Weakness Repeat
  • 479284 2023-006
    Material Weakness Repeat
  • 479285 2023-006
    Material Weakness Repeat
  • 479286 2023-006
    Significant Deficiency Repeat
  • 479287 2023-006
    Significant Deficiency Repeat
  • 479288 2023-006
    Significant Deficiency Repeat
  • 479289 2023-006
    Significant Deficiency Repeat
  • 479290 2023-006
    Significant Deficiency Repeat
  • 479291 2023-006
    Significant Deficiency Repeat
  • 479292 2023-006
    Significant Deficiency Repeat
  • 479293 2023-006
    Significant Deficiency Repeat
  • 1055694 2023-001
    Material Weakness Repeat
  • 1055696 2023-001
    Material Weakness Repeat
  • 1055697 2023-001
    Material Weakness Repeat
  • 1055698 2023-001
    Material Weakness Repeat
  • 1055699 2023-001
    Material Weakness Repeat
  • 1055700 2023-001
    Material Weakness Repeat
  • 1055701 2023-001
    Material Weakness Repeat
  • 1055702 2023-001
    Material Weakness Repeat
  • 1055703 2023-001
    Material Weakness Repeat
  • 1055704 2023-001
    Material Weakness Repeat
  • 1055705 2023-001
    Material Weakness Repeat
  • 1055706 2023-002
    Significant Deficiency Repeat
  • 1055707 2023-002
    Significant Deficiency Repeat
  • 1055708 2023-002
    Significant Deficiency Repeat
  • 1055709 2023-002
    Significant Deficiency Repeat
  • 1055710 2023-002
    Significant Deficiency Repeat
  • 1055711 2023-002
    Significant Deficiency Repeat
  • 1055712 2023-002
    Significant Deficiency Repeat
  • 1055713 2023-002
    Significant Deficiency Repeat
  • 1055714 2023-002
    Significant Deficiency Repeat
  • 1055715 2023-002
    Significant Deficiency Repeat
  • 1055716 2023-002
    Significant Deficiency Repeat
  • 1055717 2023-002
    Significant Deficiency Repeat
  • 1055718 2023-003
    Material Weakness
  • 1055719 2023-003
    Material Weakness
  • 1055720 2023-004
    Material Weakness Repeat
  • 1055721 2023-005
    Material Weakness Repeat
  • 1055722 2023-005
    Material Weakness Repeat
  • 1055723 2023-005
    Material Weakness Repeat
  • 1055724 2023-006
    Material Weakness Repeat
  • 1055725 2023-006
    Material Weakness Repeat
  • 1055726 2023-006
    Material Weakness Repeat
  • 1055727 2023-006
    Material Weakness Repeat
  • 1055728 2023-006
    Significant Deficiency Repeat
  • 1055729 2023-006
    Significant Deficiency Repeat
  • 1055730 2023-006
    Significant Deficiency Repeat
  • 1055731 2023-006
    Significant Deficiency Repeat
  • 1055732 2023-006
    Significant Deficiency Repeat
  • 1055733 2023-006
    Significant Deficiency Repeat
  • 1055734 2023-006
    Significant Deficiency Repeat
  • 1055735 2023-006
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.778 Medical Assistance Program $3.83B
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children $177.94M
93.767 Children's Health Insurance Program $143.99M
93.917 Hiv Care Formula Grants $28.34M
93.994 Maternal and Child Health Services Block Grant to the States $15.46M
93.268 Immunization Cooperative Agreements $7.73M
93.069 Public Health Emergency Preparedness $6.71M
10.558 Child and Adult Care Food Program $6.26M
93.940 Hiv Prevention Activities_health Department Based $6.24M
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $2.60M
93.889 National Bioterrorism Hospital Preparedness Program $2.50M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $2.48M
93.991 Preventive Health and Health Services Block Grant $2.09M
93.977 Preventive Health Services_sexually Transmitted Diseases Control Grants $2.00M
84.181A Special Education-Grants for Infants and Families $1.88M
93.255 Children's Hospitals Graduate Medical Education Payment Program $1.39M
93.136 Injury Prevention and Control Research and State and Community Based Programs $1.20M
93.235 Affordable Care Act (aca) Abstinence Education Program $1.18M
93.777 State Survey and Certification of Health Care Providers and Suppliers (title Xviii) Medicare $958,075
84.181 Special Education-Grants for Infants and Families $948,583
93.377 Prevention and Control of Chronic Disease and Associated Risk Factors in the U.s. Affiliated Pacific Islands, U.s. Virgin Islands, and P. R. (b) $825,561
66.432 State Public Water System Supervision $706,328
93.944 Human Immunodeficiency Virus (hiv)/acquired Immunodeficiency Virus Syndrome (aids) Surveillance $667,263
66.468 Capitalization Grants for Drinking Water State Revolving Funds $646,811
93.092 Affordable Care Act (aca) Personal Responsibility Education Program $573,302
93.336 Behavioral Risk Factor Surveillance System $540,085
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $405,413
93.070 Environmental Public Health and Emergency Response $332,433
20.607 Alcohol Open Container Requirements $301,358
93.197 Childhood Lead Poisoning Prevention Projects_state and Local Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children $284,940
93.270 Adult Viral Hepatitis Prevention and Control $263,023
93.251 Early Hearing Detection and Intervention $262,404
93.130 Cooperative Agreements to States/territories for the Coordination and Development of Primary Care Offices $225,018
93.236 Grants to States to Support Oral Health Workforce Activities $206,120
93.048 Special Programs for the Aging_title Iv_and Title Ii_discretionary Projects $157,980
93.314 Early Hearing Detection and Intervention Information System (ehdi-Is) Surveillance Program $157,808
93.946 Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative Programs $153,380
93.998 Autism and Other Developmental Disabilities, Surveillance, Research, and Prevention $115,166
93.387 National and State Tobacco Control Program (b) $74,316
14.241 Housing Opportunities for Persons with Aids $67,349
93.110 Maternal and Child Health Federal Consolidated Programs $59,893
93.967 Cdc's Collaboration with Academia to Strengthen Public Health $28,450
93.791 Money Follows the Person Rebalancing Demonstration $19,843
93.421 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $18,871
93.870 Maternal, Infant and Early Childhood Home Visiting Grant $12,384
93.008 Medical Reserve Corps Small Grant Program $11,960
93.497 Family Violence Prevention and Services/ Sexual Assault/rape Crisis Services and Supports $4,309
93.556 Promoting Safe and Stable Families $3,718
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $20
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $-168
93.074 Hospital Preparedness Program (hpp) and Public Health Emergency Preparedness (phep) Aligned Cooperative Agreements $-27,562