Finding 1061073 (2022-004)

2022-004 Reporting Compliance Requirement Reporting Category Material Weakness in Internal Control and Material Noncompliance Federal Agency U.S. Department of the Treasury Pass-Through Entity Puerto Rico Fiscal Agency and Financial Advisory Authority ALN 21.027 Federal Program COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Criteria Puerto Rico Cultural Rescue Program Guidelines (Published on December 7, 2021, and Revised on March 31, 2022). – Reporting Requirements To ensure timely reporting, the Government of Puerto Rico requires the Recipients to adhere to the following reporting frequency: On a biweekly basis, the recipients will be required to submit financial reports using the reporting template provided by the program……. 2 CFR § 200.512 Report submission. General. (1) The audit must be completed and the data collection form described in of this section and reporting package described in of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's 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 Pass-Through Entity Reporting Requirements The Corporation submitted just two reports during the year, the first and second required submission. Single Audit Reporting Package The Corporation did not comply with the Single Audit Reporting Package submission requirements for the year ended June 30, 2022 and 2023. Cause Lack of understanding of reporting compliance requirements for federal awards. Fiscal year 2022 was the first year for the Corporation to be subjected to a single audit compliance requirement for receiving and expending COVID-19 public health emergency programs. Effect By failing to comply with 2 CFR sections 200.512 and the pass-through entity reporting guidelines, the Corporation could be subjected to temporary withholding of cash payments pending correction of the deficiency, withholding further federal awards for the program, and/or wholly or partly suspending or terminating the Federal award. Questioned Costs None Recommendation We recommend that the Corporation implement the provisions of federal statutes, regulations, or the terms and conditions of federal awards regarding reporting requirements, together with the necessary internal controls, to ascertain compliance. Furthermore, to comply with the reporting compliance requirement, the Corporation must submit the compliance reporting packages in default for the fiscal year ended June 30, 2022 and 2023. Moving forward, the Corporation needs to establish controls to ensure all federal reports, including requirements set by pass-through entities, are filed on time. Views of responsible officials Refer to Corrective Action Plan section.