FINDING REFERENCE NUMBER 2024-027 (See Finding Reference Number 2024-007) FEDERAL PROGRAM (ALN – 10.566) NUTRITION ASSISTANCE FOR PUERTO RICO U.S. DEPARTMENT OF AGRICULTURE AWARD NUMBERS 231PR426S7003/4 (Federal Award Years: 10/1/2022 – 9/30/ 2023) 241PR426S7003/4 (Federal Award Years: 10/1/2023 – 9/30/ 2024) ADMINISTRATION ADMINISTRATION FOR SOCIOECONOMIC DEVELOPMENT OF THE FAMILY (ADSEF, BY ITS SPANISH ACRONYM) COMPLIANCE REQUIREMENT ELIGIBILITY TYPE OF FINDING INTERNAL CONTROL AND COMPLIANCE – MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA Uniform Guidance at 2 CFR §200.303 (a) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Benefits authorized = benefits posted. In accordance with the State Plan the following is the list of documents required for the regular verification process: photo Id, residency, authorization release form, citizenship alien status, social security, income and resources, self-employment expenses, post-secondary student status, 5-7 years old evidence studying or home schooling, care minors/dependents with disabilities, disability status, medical expenses, age and homelessness. In Regulation to Establish Eligibility Standards for the Nutrition Assistance for Puerto Rico (8684) from ADSEF, Article 21, Verification of Information, Part A: Methods of Verification, Line 1, it is established that, prior to the initial certification of the service household, the technical staff will verify the information provided by the applicant using documents that establish its authenticity. Methods of Verification: 1. Interview - The head of the service household, spouse, or authorized representative will be interviewed as part of the benefits application process. In the Manual of Procedures, it is established that the technician is responsible for documenting the required information in the “Daily Contact Sheet” (ADSEF-106G). In the Manual of Procedures, Chapter 1, Part II, Section D states that the responsibilities of the administrative staff include providing information about rights, responsibilities, warnings, and penalties. In addition, 2 CFR 200.303 (e) requires to take reasonable cybersecurity and other measures to safeguard information including protected personally identifiable information (PII) and other types of information. This also includes information the Federal agency or pass-through entity designates as sensitive or other information the recipient or subrecipient considers sensitive and is consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. STATEMENT OF CONDITION As part of our audit procedures over internal controls and compliance for eligibility requirements, we selected a sample of one hundred (100) participants who were active during the fiscal year under audit. During our audit we noted the following deficiencies: • Two (2) participants’ contact log history was incomplete. • One (1) authorization release form, and the declaration of citizenship were not completed during the application process. • Twenty-two (22) authorization release forms were not updated during the recertification or change process. • One (1) the declaration of citizenship was not observed in the participant file. • Seven (7) NAP rights, responsibilities, warnings, and penalties were not updated during the recertification or change process. • Four (4) files submitted were outside the scope of the audit period, and no information related to our audit period was provided. • In one case, the amount of income reported in the budget detail was not documented and was based on estimates derived from Social Security income, Medicare deductions, and Cost of Living (COL) adjustments, rather than verified income records. Further, the participants' social security number is used to assign the file number, and all physical files are identified with the social security number. In addition, the files are not uniform, and the documentation from the Nutrition Assistance for Puerto Rico (NAP), Payment to Territories and TANF are archived without maintaining an order, legend or uniformity between the regions. QUESTIONED COSTS None. PERSPECTIVE INFORMATION This deficiency is a systemic problem, lack of proper training and updated information to all personnel with the responsibility of determining, supervising, and monitoring the eligibility determinations and follow-up. The sampling was a statistical valid sample. STATEMENT OF CAUSE ADSEF lacks adequate controls to prevent delays in updating participant information, and insufficient controls over eligibility verification, income documentation, and file maintenance. There are no formal trainings for all regions and locals for the personnel involved in eligibility determination and subsequent follow-up. In addition, ADSEF does not have proper instructions and control over how the information should be archived in the participants’ files. POSSIBLE ASSERTED EFFECT Improper documentation and ineligible determinations increase the risk of noncompliance and may result in improper benefit payments. ADSEF is not properly safeguarding PPI of participants. In addition, the way information is being filed in the records does not allow for adequate monitoring of the documents and information necessary to comply with Federal regulations. IDENTIFICATION OF REPEAT FINDING This is a repeat of a finding reported in the prior audit as Finding Numbers 2023-008/2023-036. RECOMMENDATIONS We recommend ADSEF strengthen internal controls to ensure complete and accurate eligibility documentation. ADSEF should establish a schedule for continuous training for personnel in charge of eligibility determinations. In addition, other identification numbers should be used for participants instead of the social security number.