Finding Text
2024-005 Type of finding: Federal Award. Situation: Significant deficiency; compliance with federal regulations. Federal Program: Coronavirus State and Local Fiscal Recovery Fund (ALN 21.027) Compliance Requirements: Reporting Prior-Year(s) Audit Finding(s): None Questioned Costs: None Condition: The Municipality did not provide for our review five (5) monthly reports required to be submitted to the Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf) for the Coronavirus State Fiscal Recovery Funds (Municipal Strengthening Fund Program). Program regulations state that the report must be submitted monthly. The Municipality did not provide for our review the annual report established by Treasury regarding the Coronavirus Local Fiscal Recovery Fund program. Context: The Municipality submitted for our review seven (7) seven of the twelve (12) monthly reports required to be submitted to the Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf) for the Coronavirus State Fiscal Recovery Funds - Use of Funds Report. We were unable to evaluate five (5) of the monthly reports. These reports were required to be submitted monthly for all the expenses incurred under the Assistance Program to Municipalities. The Municipality is required to submit to the U.S. Department of Treasury a SLFRF Compliance Report every year. The Municipality did not provide for our review the Compliance Report for the Report Period: Annual March 2024. Criteria: Under the Municipal Strengthening Fund Program, the Municipality must report to the Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf) program expenses for the month, 15 days after the end of the month. Under the Coronavirus Local Fiscal Recovery Fund Award Terms and Conditions Agreement with the U.S. Department of Treasury, the Municipality agrees to comply with any reporting obligations established by Treasury as they relate to this award. Also, records shall be maintained by the recipient for a period of five (5) years after all funds have been expended or returned to Treasury, whichever is later. Cause: The Municipality did not have adequate internal controls or monitoring procedures in place to ensure that all required Coronavirus State and Local Fiscal Recovery Fund reports were timely prepared, submitted, and retained for audit and oversight purposes. Effect: The Municipality is not in compliance with its grant awards. As per 2 CFR 200.339 When the Federal agency determines that noncompliance cannot be remedied by imposing specific conditions, the Federal agency may take one or more of the following actions: (a) Temporarily withhold payments until the recipient or subrecipient takes corrective action, (b) Disallow costs for all or part of the activity associated with the noncompliance of the recipient or subrecipient., (c) Suspend or terminate the Federal award in part or in its entirety, among others measures. Auditor’s recommendation: The Municipality should implement internal controls and procedures to ensure that the required reports are completed and submitted in a timely manner, and made available for audit, as per program regulations. View of responsible officials: All monthly reports were delivered on time to AFAAF as established on the guidelines and following the agency’s reporting guidelines and support. The Municipality is full compliance with the Puerto Rico Fiscal Agency and Financial and Financial Advisory Authority. Auditor Comments: The Municipality did not provide for our review five (5) monthly reports required to be submitted to the Puerto Rico Fiscal Agency and Financial Advisory Authority (Aafaf) for the Coronavirus State Fiscal Recovery Funds (Municipal Strengthening Fund Program), therefore we were unable to ascertain if these reports were submitted timely to the Puerto Rico Fiscal Agency and Financial Advisory Authority (AFAAF) The Municipality did not provide for our review the Compliance Report for the Report Period: Annual March 2024, therefore we cannot ascertain that this report was submitted timely to the U.S. Department of Treasury. Audit Status: Unresolved