FAC Explorer

Finding 392445 (2022-004)

Material Weakness Repeat Finding
Requirement
G
Questioned Costs
-
Year
2022
Accepted
2024-04-05
Audit: 302752
Organization: Puerto Rico Safe Drinking Water Treatment Revolving Loan Fund (PR)
Auditor: Aquino De Cordova LLC

AI Summary

  • Core Issue: PRDH lacks adequate financial record segregation, making it difficult to trace funds and ensure compliance with grant restrictions.
  • Impacted Requirements: Non-compliance with 45 CFR sections 92.20(a) and (b) could lead to exceeding expenditure limits and potential administrative sanctions.
  • Recommended Follow-Up: Expand the chart of accounts to accurately track expenditures and ensure payroll expenses are recorded by program activity; implementation expected by end of 2024.

Finding Text

Criteria 45 CFR sections 92.20(a) and (b) (1) to (4) establish that: a) A State must expend and account for grant funds in accordance with State laws and procedures for expending and accounting for its own funds. Fiscal control and accounting procedures of the State, as well as its subgrantees and cost-type contractors, must be enough to, 1. Permit preparation of reports required by this part and the statutes authorizing the grant, and 2. Permit the tracing of funds to a level of expenditure adequate to establish that such funds have not been used in violation of the restrictions and prohibitions of applicable statutes. b) The financial management systems of other grantees and subgrantees must meet the following standards: 1. Financial reporting. Accurate, current, and complete disclosure of the financial results of financially assisted activities must be made in accordance with the financial reporting requirements of the grant or subgrant. 2. Budget control. Actual expenditures or outlays must be compared with budgeted amounts for each grant or subgrant. Financial information must be related to performance or productivity data, including the development of unit cost information whenever appropriate or specifically required in the grant or subgrant agreement. if unit cost data are required, estimates based on available documentation will be accepted whenever possible. Condition We noted the following deficiencies related to the grant awards B04MC40159, B04MC45241: a. The PRDH does not segregate financial records sufficiently in order to permit the tracing of funds to a level of expenditures adequate to establish that such funds have not been used in violation of the percentage restrictions of the grant award. b. We could not evaluate if the program is in compliance with the established earmarking requirements since the expenses were recorded for each of the award components and not the earmarking activity. Cause This situation occurs because the accounting records currently used by the PRDH do not have a reliable system to account for funds awarded to them. The chart of accounts in the financial system is not sufficiently expanded to account for each of the earmark requirements. Effect The PRDH could exceed the established expenditures limits per activity for the grant award. Non¬compliance with the earmarking requirements could lead to significant administrative sanctions by the grantor, including reduction in the amounts to be awarded. It could also be interpreted as a failure to achieve program objectives. Questioned Costs None Perspective Information Finding represents a significant problem. The agency will review internal controls to ensure that comply with federal government requirements. Prior Year Audit Finding 2021-008 Recommendation The PRDH must expand the chart of accounts in order to account for the amounts claimed for administrative expenditures independently. This expansion would permit the tracing of funds to a level of expenditure to establish that such funds have not been used in violation of the restrictions and prohibitions of the program as defined in 42 USC 705(a)(3). Also, payroll expenses must be recorded into each of the corresponding program activities, as follows: a) Preventive and primary care services for children. b) Services for children with special health care needs. Views of Responsible Officials The PRDOH partially agrees with the finding. The narrative of compliance with the requirement is presented annually in the report to the federal government. They are evidenced by the completed forms for budget and reported expenses that are submitted for the annual request for funds. The accounts between the programs have already been separated, so it shows the fulfillment of the Earmarking 30-30-10; Each is assigned 30% or more for required service and no more than 10% for the administration thereof. In the order hand the PRDOH has encountered challenges with the payroll to separate the percentage work for each grant however, this is shown on all the monitoring made by the federal government and all the reports send by the program. Also, with the new ERP from the Department of Treasury the new system will allow for that purpose, at this time the Department of treasury is currently working with the agency with the data conversation to migrate to the new system, this system is expected to be running by October 2024. Responsible Officials Dr. Manuel Vargas Bernier Program Director 787-765-2929 ext. 4583 Mrs. Diana Ferrer Rivera Senior Accountant 787-765-2929 ext. 4551 Estimate Date of Completion Implementation is expected to be completed on or before the end of the year, 2024.

Corrective Action Plan

Maternal and Child Health Services Block Grants to the States Earmarking Material Weakness in Internal Control over Compliance The PRDOH partially agrees with the finding. The narrative of compliance with the requirement is presented annually in the report to the federal government. They are evidenced by the completed forms for budget and reported expenses that are submitted for the annual request for funds. The accounts between the programs have already been separated, so it shows the fulfillment of the Earmarking 30-30-10; Each is assigned 30% or more for required service and no more than 10% for the administration thereof. In the order hand the PRDOH has encountered challenges with the payroll to separate the percentage work for each grant however, this is shown on all the monitoring made by the federal government and all the reports send by the program. Also, with the new ERP from the Department of Treasury the new system will allow for that purpose, at this time the Department of treasury is currently working with the agency with the data conversation to migrate to the new system, this system is expected to be running by October 2024.

Categories

Matching / Level of Effort / Earmarking Subrecipient Monitoring Reporting

Other Findings in this Audit

  • 392413 2022-001
    Material Weakness Repeat
  • 392414 2022-001
    Material Weakness Repeat
  • 392415 2022-001
    Material Weakness Repeat
  • 392416 2022-001
    Material Weakness Repeat
  • 392417 2022-001
    Material Weakness Repeat
  • 392418 2022-001
    Material Weakness Repeat
  • 392419 2022-001
    Material Weakness Repeat
  • 392420 2022-001
    Material Weakness Repeat
  • 392421 2022-001
    Material Weakness Repeat
  • 392422 2022-001
    Material Weakness Repeat
  • 392423 2022-001
    Material Weakness Repeat
  • 392424 2022-001
    Material Weakness Repeat
  • 392425 2022-001
    Material Weakness Repeat
  • 392426 2022-001
    Material Weakness Repeat
  • 392427 2022-001
    Material Weakness Repeat
  • 392428 2022-002
    Significant Deficiency Repeat
  • 392429 2022-002
    Significant Deficiency Repeat
  • 392430 2022-002
    Significant Deficiency Repeat
  • 392431 2022-002
    Significant Deficiency Repeat
  • 392432 2022-002
    Significant Deficiency Repeat
  • 392433 2022-002
    Significant Deficiency Repeat
  • 392434 2022-002
    Significant Deficiency Repeat
  • 392435 2022-002
    Significant Deficiency Repeat
  • 392436 2022-002
    Significant Deficiency Repeat
  • 392437 2022-002
    Significant Deficiency Repeat
  • 392438 2022-002
    Significant Deficiency Repeat
  • 392439 2022-002
    Significant Deficiency Repeat
  • 392440 2022-002
    Significant Deficiency Repeat
  • 392441 2022-002
    Significant Deficiency Repeat
  • 392442 2022-002
    Significant Deficiency Repeat
  • 392443 2022-003
    Significant Deficiency
  • 392444 2022-003
    Significant Deficiency
  • 392446 2022-005
    Material Weakness Repeat
  • 392447 2022-006
    Material Weakness Repeat
  • 392448 2022-006
    Material Weakness Repeat
  • 392449 2022-006
    Material Weakness Repeat
  • 392450 2022-006
    Material Weakness Repeat
  • 392451 2022-007
    Material Weakness
  • 392452 2022-007
    Material Weakness
  • 392453 2022-007
    Material Weakness
  • 392454 2022-007
    Material Weakness
  • 392455 2022-008
    Material Weakness
  • 392456 2022-008
    Material Weakness
  • 392457 2022-008
    Material Weakness
  • 392458 2022-008
    Material Weakness
  • 392459 2022-008
    Material Weakness
  • 392460 2022-008
    Material Weakness
  • 392461 2022-008
    Material Weakness
  • 392462 2022-008
    Material Weakness
  • 392463 2022-008
    Material Weakness
  • 392464 2022-008
    Material Weakness
  • 392465 2022-008
    Material Weakness
  • 392466 2022-008
    Material Weakness
  • 392467 2022-008
    Material Weakness
  • 392468 2022-008
    Material Weakness
  • 392469 2022-008
    Material Weakness
  • 968855 2022-001
    Material Weakness Repeat
  • 968856 2022-001
    Material Weakness Repeat
  • 968857 2022-001
    Material Weakness Repeat
  • 968858 2022-001
    Material Weakness Repeat
  • 968859 2022-001
    Material Weakness Repeat
  • 968860 2022-001
    Material Weakness Repeat
  • 968861 2022-001
    Material Weakness Repeat
  • 968862 2022-001
    Material Weakness Repeat
  • 968863 2022-001
    Material Weakness Repeat
  • 968864 2022-001
    Material Weakness Repeat
  • 968865 2022-001
    Material Weakness Repeat
  • 968866 2022-001
    Material Weakness Repeat
  • 968867 2022-001
    Material Weakness Repeat
  • 968868 2022-001
    Material Weakness Repeat
  • 968869 2022-001
    Material Weakness Repeat
  • 968870 2022-002
    Significant Deficiency Repeat
  • 968871 2022-002
    Significant Deficiency Repeat
  • 968872 2022-002
    Significant Deficiency Repeat
  • 968873 2022-002
    Significant Deficiency Repeat
  • 968874 2022-002
    Significant Deficiency Repeat
  • 968875 2022-002
    Significant Deficiency Repeat
  • 968876 2022-002
    Significant Deficiency Repeat
  • 968877 2022-002
    Significant Deficiency Repeat
  • 968878 2022-002
    Significant Deficiency Repeat
  • 968879 2022-002
    Significant Deficiency Repeat
  • 968880 2022-002
    Significant Deficiency Repeat
  • 968881 2022-002
    Significant Deficiency Repeat
  • 968882 2022-002
    Significant Deficiency Repeat
  • 968883 2022-002
    Significant Deficiency Repeat
  • 968884 2022-002
    Significant Deficiency Repeat
  • 968885 2022-003
    Significant Deficiency
  • 968886 2022-003
    Significant Deficiency
  • 968887 2022-004
    Material Weakness Repeat
  • 968888 2022-005
    Material Weakness Repeat
  • 968889 2022-006
    Material Weakness Repeat
  • 968890 2022-006
    Material Weakness Repeat
  • 968891 2022-006
    Material Weakness Repeat
  • 968892 2022-006
    Material Weakness Repeat
  • 968893 2022-007
    Material Weakness
  • 968894 2022-007
    Material Weakness
  • 968895 2022-007
    Material Weakness
  • 968896 2022-007
    Material Weakness
  • 968897 2022-008
    Material Weakness
  • 968898 2022-008
    Material Weakness
  • 968899 2022-008
    Material Weakness
  • 968900 2022-008
    Material Weakness
  • 968901 2022-008
    Material Weakness
  • 968902 2022-008
    Material Weakness
  • 968903 2022-008
    Material Weakness
  • 968904 2022-008
    Material Weakness
  • 968905 2022-008
    Material Weakness
  • 968906 2022-008
    Material Weakness
  • 968907 2022-008
    Material Weakness
  • 968908 2022-008
    Material Weakness
  • 968909 2022-008
    Material Weakness
  • 968910 2022-008
    Material Weakness
  • 968911 2022-008
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.778 Medical Assistance Program $2.97B
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children $150.77M
93.767 Children's Health Insurance Program $111.87M
93.917 Hiv Care Formula Grants $27.92M
93.994 Maternal and Child Health Services Block Grant to the States $13.34M
10.578 Wic Grants to States (wgs) $6.36M
93.069 Public Health Emergency Preparedness $6.16M
93.966 The Zika Health Care Services Program $4.32M
93.889 National Bioterrorism Hospital Preparedness Program $3.13M
84.181 Special Education-Grants for Infants and Families $2.86M
93.268 Immunization Cooperative Agreements $2.75M
93.991 Preventive Health and Health Services Block Grant $2.41M
93.110 Maternal and Child Health Federal Consolidated Programs $1.84M
93.136 Injury Prevention and Control Research and State and Community Based Programs $1.83M
93.235 Affordable Care Act (aca) Abstinence Education Program $1.59M
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $1.44M
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $1.39M
93.977 Preventive Health Services_sexually Transmitted Diseases Control Grants $1.28M
93.255 Children's Hospitals Graduate Medical Education Payment Program $1.04M
93.377 Prevention and Control of Chronic Disease and Associated Risk Factors in the U.s. Affiliated Pacific Islands, U.s. Virgin Islands, and P. R. (b) $902,678
93.777 State Survey and Certification of Health Care Providers and Suppliers (title Xviii) Medicare $876,845
66.468 Capitalization Grants for Drinking Water State Revolving Funds $792,740
93.870 Maternal, Infant and Early Childhood Home Visiting Grant $727,037
66.432 State Public Water System Supervision $608,799
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $371,524
93.070 Environmental Public Health and Emergency Response $354,863
93.092 Affordable Care Act (aca) Personal Responsibility Education Program $349,580
93.944 Human Immunodeficiency Virus (hiv)/acquired Immunodeficiency Virus Syndrome (aids) Surveillance $257,928
93.251 Early Hearing Detection and Intervention $253,036
93.048 Special Programs for the Aging_title Iv_and Title Ii_discretionary Projects $234,825
93.236 Grants to States to Support Oral Health Workforce Activities $227,330
93.817 Hospital Preparedness Program (hpp) Ebola Preparedness and Response Activities $216,975
93.314 Early Hearing Detection and Intervention Information System (ehdi-Is) Surveillance Program $170,942
93.946 Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative Programs $160,918
20.607 Alcohol Open Container Requirements $154,751
93.336 Behavioral Risk Factor Surveillance System $153,793
93.130 Cooperative Agreements to States/territories for the Coordination and Development of Primary Care Offices $138,398
93.940 Hiv Prevention Activities_health Department Based $97,967
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $84,067
93.270 Adult Viral Hepatitis Prevention and Control $65,865
14.241 Housing Opportunities for Persons with Aids $58,672
93.073 Birth Defects and Developmental Disabilities - Prevention and Surveillance $31,870
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $22,259
93.197 Childhood Lead Poisoning Prevention Projects_state and Local Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children $18,302
93.745 Pphf: Health Care Surveillance/health Statistics Ð Surveillance Program Announcement: Behavioral Risk Factor Surveillance System Financed in Part by Prevention and Public Health Fund $15,511
93.421 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $9,250
93.387 National and State Tobacco Control Program (b) $6,982
93.074 Hospital Preparedness Program (hpp) and Public Health Emergency Preparedness (phep) Aligned Cooperative Agreements $3,492
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $-11,111