Finding Text
Criteria:
Finance Policies to Administer CDBG-DR established by the Puerto Rico Department of Housing in its Chapter 15
Section 2, requires that-sub recipients must capitalize property and equipment with a cost of $500 or more.
Condition:
The capitalization threshold used for property and equipment acquired with CDBG funds is not in compliance with
Finance Policies to administer CDBG-DR funds, as established by the Puerto Rico Department of Housing.
SECTION III –FEDERAL AWARD FINDINGS AND QUESTIONS COSTS
Cause:
The capitalization policy followed by BGCPR is to capitalize property and equipment with a cost of $1,000 or more.
Effect or potential effect:
Property and equipment acquired with CDBG-DR funds is being expensed instead of capitalized.
Recommendation:
We recommend that management updates its capitalization policy to include this specific requirement for property
and equipment acquired with CDBG-DR funds.
Views of responsible officials:
Management will add a capitalization procedure for this program to its finance manual and make the adjustments in
the property land equipment subsidiary. Expected completion date is June 30, 2024.