Finding Text
Finding Reference 2024-005
Federal Agency: U.S. Department of Health and Human Services
Pass-through
Agency: Puerto Rico Department of Family
Program: Child Care and Development Block Grant (ALN 93.575)
Compliance
Requirement: Earmarking (G)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of
Noncompliance (NC)
Statement of Condition: In our Earmarking Test, we were not able to corroborate compliance with the earmarking requirements because the Municipality did not submit the program’s annual closing reports.
Criteria: 45 CFR, Subpart F, Section 98.50 (b) (1) states that of the aggregate amount of funds expended by a State or Territory, no less that seven percent in fiscal years 2016 and 2017, eight percent in fiscal years 2018 and 2019, and nine percent in fiscal year 2020 and each succeeding fiscal year shall be used for activities designed to improve the quality of child care services and increase parental options for, and access to, high-quality child care as described at 45 CFR Subpart F, Section 98.53. Section 98.50 (b) (2) states that no less than three percent in fiscal year 2017 and each succeeding fiscal year shall be used to carry out activities as such activities relate to the quality of care for infants and toddlers. Also, section 98.50 (b) (3) states that nothing in this section shall preclude the State or Territory from reserving a larger percentage of funds to carry out activities described in paragraphs (b) (1) and (2) of Section 98.50.
45 CFR, Subpart F, Section 95.50 (d) states of the aggregate amount of funds expended, no more than five percent may be used for administrative activities as described in 45 CFR 98.54.
45 CFR, Subpart F, Section 95.50 (f) (2) states that from Discretionary amounts provided for a fiscal year, the Lead Agency shall use not less than 70 percent to fund direct services (provided by the Lead Agency).
Cause of Condition: The Program does not have effective internal controls to ensure that the required documentation and reports are submitted to the pass-through agency in the requested time frame.
Effect of Condition: The program is not in compliance with 45 CFR, Subpart F, Section 98.50.
Recommendation: We recommend the Program’s Management to take the necessary steps to ensure that the Program submits its financial reports within the time frame required by the state pass-through agency.
Questioned Cost: None.
Prior Year Findings: Yes. This finding is similar to prior-year finding 2023-005.
Views of Responsible
Officials and Planned
Corrective Actions: We concur with the finding. The ACUDEN agency has not yet closed the budget year 2023-2024. Therefore, even though the contract has ended, the remaining reimbursement from the agency has not been received. Therefore, the full closing report cannot be completed until this final amount is received. As a corrective measure for finding 2024-006, the Sub Director of Finance will establish an internal control system in which the processes and compliance with the submission of accounting reports for federal programs, including Child Care, will be periodically monitored.
Implementation Date: Fiscal Year 2025-2026.
Responsible Person: José A. Mathews Maisonet
Program Accountant