Finding Text
MUNICIPALITY OF GUÁNICA, PUERTO RICO SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2023 SECTION III – Federal Award Finding and Questioned Costs FINDING 2023-006 FEDERAL PROGRAM COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) (ASSISTANCE LISTING NO. 14.228) DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PASS THROUGH STATE HOUSING DEPARTMENT CATEGORY INTERNAL CONTROL REQUIREMENT EQUIPMENT AND REAL PROPERTY MANAGEMENT TYPE OF FINDING NON COMPLIANCE CONDITION The Municipality and the Community Development Block Grant Program (CDBG) are not maintaining adequate internal controls over property and equipment items acquired with Federal Funds. In testing property and equipment, we noted the following: The property records do not indicate, among other things the source of the property, who holds title, the acquisition date, cost of the property, percentage of Federal participation in the cost of the property, use and condition of the property, and any ultimate disposition data including the date of disposal. CRITERIA 2 CFR, Section 200.313 (d) (1), states that the Property records must include a description of the property, a serial number or another identification number, the source of funding for the property, the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. CAUSE The CDBG Program has inadequate internal control procedures that guarantee adequate records, registering and safeguarding of property and equipment. EFFECT The lack of adequate internal controls over property and equipment records may hinder management’s ability to properly monitor, safeguard and account for such assets. RECOMMENDATION We recommend management strengthen the internal controls over property and equipment by establishing and implementing procedures to ensure that the property record includes all required information in accordance with Federal regulation. PRIOR YEAR N/A MANAGEMENT RESPONSE We concur with the finding RESPONSIBLE OFFICIALS Mrs. Grety Martinez, Finance Department Director Mrs. Deryn Nuñez, Federal Program Director