Finding Text
Finding Reference 2024-003
Federal Agency: U.S. Department of Treasury
Pass-Through Agency: Puerto Rico Fiscal Agency and Financial Advisory Authority
Program: Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing No. 21.027)
Compliance Requirement: Reporting (L)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
This finding is similar to prior-year finding 2023-003.
Statement of Condition In our Reporting Test, we evaluated the Project and Expenditure Report submitted to the U.S. Department of Treasury during fiscal year 2023-2024. During our audit procedures, we identified differences between the amounts reported as current period expenditures, and the amounts recognized in the accounting system.
Additionally, during the fiscal year the Municipality received new funds called Service of Excellence to Citizens also related to the Coronavirus State and Local Fiscal Recovery Funds Program. This allocation was granted through the Puerto Rico Fiscal Agency and Financial Advisory Authority. In our Reporting Test, we evaluated six (6) reports and we found the following situations:
a) We cannot validate the submission of two (2) of them;
b) Two (2) of them were not submitted in a timely manner.
Criteria The Coronavirus State and Local Fiscal Recovery Funds - Compliance and Reporting Guidance, Part I, Section 10 (d), states that all recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Appropriate accounting records must be maintained for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles.
In addition, where appropriate, controls need to be established to ensure the completion and timely submission of all mandatory performance and/or compliance reporting.
On the other hand, the Resolution 2023-114 approved by Assistant Secretary of the Disbursement Oversight Committee, establishes recipients under this Program (Service of Excellence to Citizens), as with all other eligible disbursements of CSFRF funds, shall remit to FAFAA biweekly reports detailing the use of funds for the purpose of complying with federal regulations and reporting to the Office of the Inspector General. These reports must be sent on the first and third Friday of each month, even if they do not have expenses for that month.
Cause of Condition The Municipality does not have the necessary personnel assigned to prepare, review and present the reports in a timely manner.
Effect of Condition The program is not in compliance with the reporting requirements as established by the Federal agencies.
Recommendation We recommend training for the authorized personnel who administer the program, to better understand the reporting requirements and prepare timely reports. The Municipality should establish a monitoring system to ensure compliance with requirements established by the passthrough agency such as: submitting the reports during the required time frame and where the fund expenses will be reported as incurred. This will ensure better control of the program.
Questioned Cost None.
Prior Year Finding Yes. This finding is similar to prior-year finding 2023-003.
Views of Responsible Officials and Planned Corrective Action We concur with the finding. The authorized personnel understand the reporting requirements. We are in the process of training additional personnel to have more resources to comply with all reporting requirements. The Finance Department is working with external consultants to address this situation and be able to comply with all reports as required.
Implementation Date: June 30, 2025
Responsible Person: Carmen I. López
Interim Finance Director