Finding Text
Finding Reference 2025-003 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) This finding is similar to prior-year finding 2024-004 & 2023-004. Statement of Condition In our Earmarking Test, we found that the Program did not comply with the direct spending earmark limitation that requires the program to spend no less than seventy percent (70%) to fund direct services. Criteria 45 CFR, Subpart F, Section 95.50 (f) (2) states that from Discretionary amounts provided for a fiscal year, the Lead Agency shall use no less than seventy percent (70%) to fund direct services (provided by the Lead Agency). Cause of Condition The program’s budget, approved by the pass-through entity, was not distributed according to the cost limitations required for the direct services. Therefore, the amount spent per category of expenditure did not meet the minimum amount. 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 request to the pass-through entity a revision of the approved budgeted amounts in order to make all the required adjustments to comply with the program cost limitations. Questioned Cost None Views of Responsible Officials and Planned Corrective Action We concur with the finding. As an internal control and prevention measure, the budget sent by the Agency will be verified with the percentages (%) established in the contract. If they do not match, ACUDEN will be asked to amend the budget. Also, as part of the corrective action plan, the municipality will be moving the location of its centers in search of better accessibility for participants and to be more aggressive in providing services and spending the allocations in full. Implementation Date: During fiscal year 2025-2026. Responsible Person: Mrs. Natasha Vázquez Federal Programs Director