FAC Explorer

Finding 19870 (2022-001)

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Requirement
P
Questioned Costs
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Year
2022
Accepted
2023-06-29
Audit: 23582
Organization: Commonwealth of Puerto Rico Department of Natural and Environmental Resources (PR)
Auditor: Galindez LLC

AI Summary

  • Core Issue: The data collection form and reporting package for the Clean Water State Revolving Fund were not submitted on time, violating federal audit requirements.
  • Impacted Requirements: Compliance with Title 2 U.S. CFR Part 200, which mandates timely submission of audit reports within 30 days or nine months post-audit period.
  • Recommended Follow-Up: Ensure timely submission of required documents and improve accounting processes to provide accurate financial information to management consistently.

Finding Text

Finding No. 2022-001 Audit Requirements for Auditees ? Report Submission Federal program Clean Water State Revolving Fund Cluster: ALN 66.458 Capitalization Grants for Clean Water State Revolving Funds Name of federal agency U.S. Environmental Protection Agency (EPA) Pass-through entity Puerto Rico Department of Natural and Environmental Resources Category Compliance/Internal Control Compliance requirements Other Criteria As required by the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), ? 200.512 Report submission (a) (1), ? the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditors? report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day?. Condition found The data collection form and the reporting package for the year ended on June 30, 2022 was not submitted to the Federal Audit Clearinghouse within the timeframe prescribed by the Uniform Guidance. Cause Accounting and reporting processes are being delayed and thus, the information necessary to complete the financial statement audit procedures was not available within the timeframe prescribed by the Uniform Guidance. Effect As a result of this condition, the EPA may issue warnings and/or impose penalties to the Revolving Fund. Also, the EPA was prevented the use of accurate reporting data, which is critical for the effective administration of the federal program and for EPA budgetary policy analysis. Questioned cost None. Context N/A Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Views of responsible officials and planned corrective actions The management of the Revolving Fund agree with this finding. Please refer to the corrective action plan section on page 44. Recommendation The data collection form and single audit package must be submitted within the required due dates. Also, we strongly suggest the accounting department to take whatever steps necessary to ensure that senior management receives current and accurate financial information on a timely basis. If it is determined that the department is understaffed, steps should be taken to alleviate this problem so that work can remain current without an undue hardship on any one employee. Once up to date, the accounting staff must consistently provide management with the accurate financial reports and information necessary to effectively manage the Revolving Fund?s operations

Corrective Action Plan

Finding No. 2022-001 Audit Requirements for Auditees ? Report Submission Condition found The data collection form and the reporting package for the year ended on June 30, 2022 was not submitted to the Federal Audit Clearinghouse within the timeframe prescribed by the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan Department of Natural and Environmental Resources (DNER), Puerto Rico Infrastructure Financing Authority (PRIFA), Puerto Rico Aqueduct and Sewer Authority (PRASA), entered on December 27, 2016, into a Memorandum of Understanding (MOU), subsequently amended on June 21, 2018, to include the Fiscal Agency and Financial Advisory Authority (FAFAA). Under the MOU, as amended, each party has agreed to assume specific responsibilities in connection with the operations of the Revolving Fund pursuant to the Operating Agreement entered between the EPA and the DNER on July 25, 2018. Pursuant to the MOU, as amended, DNER will remain as the administrator for the Revolving Fund, PRIFA will act as the operating agent to provide assistance with the financial and accounting activities, and FAFAA will conduct the financial capabilities analysis of any eligible assistance recipient of funds, provide the necessary information to the DNER and PRIFA to the extent as possible for the development of the different programs compliance reports reviews, provide oversight as fiscal agent, financial advisor and information agent of the Commonwealth to ensure that the monies are safeguarded in a trust structure and to ensure the proper administration. The data collection form and the reporting package were not file on time due to lack and availability of funds to cover expenses related to the audit process and other expenses related to the administrative responsibilities assigned in the Memo of Understanding to PRIFA. Management is currently working with DNER a Subaward, as required by the Environmental Protection Agency (EPA) and as established in the MOU, as amended, in order to respond to the lack of funding to cover all the related expenses for the administrative responsibilities assigned to PRIFA. EPA has been informed and communication will be maintained until the Subaward is in force. Management plans are to file the data collection form for the fiscal year ended on June 30, 2022 on or before June 30, 2023 and the data collection form for the fiscal year ending on June 30, 2023 on or before December 31, 2023, which will result in the elimination of the finding. Name (s) of the Contact Person (s) Responsible for Corrective Action Francisco Pares, Secretary of the Treasury Department, Eduardo Rivera Cruz, Executive Director Puerto Rico Infrastructure Financing Authority and Anais Rodriguez Vega, Secretary Puerto Rico Department of Natural and Environmental Resources Anticipated Completion Date June 2023

Categories

Subrecipient Monitoring Allowable Costs / Cost Principles Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
66.458 Capitalization Grants for Clean Water State Revolving Funds $19.36M