Finding Text
Finding Reference 2025-005 Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: P.R. Department of Family Federal Program: Child Care and Development Block Grant (ALN 93.575) Requirement: Earmarking (G) Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC) 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 amounts that were spent on direct services did not meet the minimum amount. Effect of Condition: The program is not in compliance with 45 CFR, Subpart F, Section 98.50. Recommendation: Management should take the necessary steps to ensure that the Program complies with the direct service earmarking requirements. The way to guarantee compliance would be by spending the entire allocation for the fiscal year. If management anticipates that it will not spend the entire allocation, it should request budget modifications from the delegating agency. Questioned Cost: None. Prior Year Finding: Yes. This finding is similar to prior-year finding 2024-005. Views of Responsible Officials and Planned Corrective Action: We concur with the audit finding. The Municipality did not comply with the required direct service spending percentage due to the limited availability of direct service providers under the program’s Child Care Network (Red de Cuido) division. As a result, only 10 children were enrolled, compared to the 18 originally budgeted. This situation ultimately led to the elimination of the Child Care Network division in the 2025-2026 proposal, as the program required a minimum of 10 service providers, a threshold that could not be met due to the lack of available personnel. Implementation Date: June 30, 2026 Responsible Person: Mr. Hector R. Sanjurjo Rodríguez Federal Programs Director