Finding Text
Finding Reference: 2022-003 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: Puerto Rico Department of Family Program: Head Start Program Cluster (ALN 93.600 & 93.365) Compliance Requirement: Reporting - Financial Administration (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) This finding is similar to prior-year finding(s): 2021-003 and 2020-004. Statement of Condition: In our Reporting Test, we found differences between the amounts reported as federal expenditures in the Federal Financial Report SF-425 submitted to the federal agency and the amounts detailed in the trial balance. As result, the financial reports do not agree with the program accounting records. Alternate procedures were used to report the expense. Criteria: The OMB Common Rules, Subpart C, Section .20 (b) (1), states that the grantee must maintain internal control procedures that permits proper tracing of funds to the accounting records. Also, it requires accurate, current and complete disclosure of financial results. The agreement with the pass-through entity, the Commonwealth of Puerto Rico ? Family Department (ACUDEN), Clause eight (8), Section 11, states that the utilization of the official accounting system of the program, Abila MIP Fund Accounting Software, is required. Other accounting systems will not be considered as the official accounting systems of the program for the purpose of federal, state, or local audits. All journal entries of the project should be registered in the system. Disbursement not registered in the Abila MIP Fund Accounting Software will not be processed. It is the responsibility of the grantee to keep the information up to date for it to reflect an accurate financial position of the institution. Cause of Condition: The required accounting system is not used as reporting source. Also, adequate internal controls do not exist to assure that the required accounting system be used and the information is reconciled with the closing reports submitted to the federal agencies. Effect of Condition: The program is not in compliance with the Common Rules, Subpart C, Section .20 (b) (1). Recommendation: We recommend the Program establishes monitoring procedures to ensure the accuracy of accounting records and a correct completion of the closing reports. The Program fiscal area ensures that accounting records are updated at the end of each month in order to prepare accurate reports to the federal agency. In addition, the accountant must ensure that the Abila MIP Fund Accounting Software is used to present the financial position of the Program and as the reporting source as established by the pass-through entity. Questioned Cost: None Views of Responsible Officials and Planned Corrective Action: During the evaluated period, the Abila MIP Fund Accounting Software System was not available, so the Rock Solid System was used for federal reporting, as a corrective action, ACUDEN was requested to establish a clause in the fund delegation contract with the authorization of the use of the Rock Solid accounting system. This clause was included in the contract 2023-001904 for the 2023-2024 fiscal year. Implementation Date: During fiscal year 2023-2024. Responsible Person: Mrs. Idenisse Diaz Head Start Program Director