Finding Text
Criteria: § 200.502 CFR determines basis for determining Federal awards expended: (a) The determination of when a federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity related to the Federal award pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as:(1) Expenditure/expense transactions associated with grants, cooperative agreements, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, and direct appropriations;(2) The disbursement of funds to subrecipients;(3) The use of loan proceeds under loan and loan guarantee programs;(4) The receipt of property (including surplus property); (5) The receipt or use of program income;(6) The distribution or use of food commodities; (7) The disbursement of amounts entitling the non-Federal entity to an interest subsidy; and (8) The period when insurance is in force. Condition: The Authority had to revise 2021 SEFA report, for expenditures that were to be claimed on private insurance as insurance claims. These claims did not constitute federals expenditures. After a thorough analysis, it was determined that the amount of $2,307,659 was covered by claims from the agency’s property insurance for damage caused by hurricanes and earthquakes, as follows: Previously reported $ 4,040,610 Adjustment 2,307, 659 Adjusted expenditures $ 1,732,951 Cause: The complexities of private insurance coverage effect over FEMA expenditures caused errors in the amounts to be reported as federal expenditures. Effect: Amounts of FEMA federal expenditure reported in the previously reported SEFA were misstatedManagement response: The condition occurred due to the absence of a formalized reconciliation procedure to identify third-party reimbursements (e.g., insurance recoveries) prior to the compilation of federal expenditures reported in the SEFA. Corrective Measures, internal Control Enhancement, the Authority has revised its SEFA preparation procedures to incorporate a formal reconciliation process between General Ledger federal expenditures, Third-party reimbursement records (including insurance recoveries), and Federal award financial reports. This reconciliation will be documented, reviewed by supervisory personnel within the Comptroller’s Office, and retained as part of the SEFA supporting documentation in accordance with record retention requirements under Uniform Guidance. Training and Capacity Development: Personnel responsible for grants accounting and SEFA preparation will complete additional training on 2 CFR Part 200 (Uniform Guidance), FEMA cost eligibility and documentation requirements, Identification and treatment of non-federal offsets to federal expenditures. Responsable Officer: Mr. José R. González De la Vega Estimated Completion Date: To work it on or before July 2026. Recommendation: To improve information and communication controls with FEMA authorities about the identification of amounts to be reported in SEFA. Questioned Costs: None Perspective of the information: The information was not drawn from statistical sample. Prior Year Finding: No