Finding 406039 (2021-002)

Finding No. 2021-002 - Reporting Federal Program Assistance Listing 21.019 – Coronavirus Relief Fund – COVID - 19 Name of Federal Agency U.S. Department of Treasury Pass-through entity Puerto Rico Treasury Department Category Significant deficiency in internal controls over compliance / Non-compliance Compliance requirements ReportingCriteria As stated in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), § 200.303 Internal controls, “the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards.” In addition, the grant agreement establishes in its Exhibit A of the AAFAF guidelines, Grant Plan, Reporting, the following: “By the 15th day of each month, the Grantee will submit a Use of Funds Grant Report for the prior month’s expenses. The financial report will provide a detailed explanation of how the Grant funds were spent.”Condition During our test, we identified that the Use of Funds Grant Reports that were required to be submitted by the 15th day of the following month, were submitted late, as follows:Cause The grantee did not perform effective monitoring for the compliance with the deadlines of submission and also, did not have adequate internal controls for the recordkeeping of submissions. Effect The Hospital did not submit, or did not submit on time, the financial reports that provide a detailed explanation of how the grant funds were spent and the timing of the expenditures. The analysis, evaluations, and decision-making of the grantee could be affected. Questioned cost None.Context As part of the reporting (timing) test, we examined ten (10) submission dates required, which represent the 100% of submissions required for the year for the Coronavirus Relief Fund and observed that ten (10) of the Use of Funds Grant Reports, or 100% of the required reports, were submitted after their respective due dates. Identification of a repeat finding Yes, this is a repeated finding from the immediate previous audit, finding No. 2020-002. Views of responsible officials and planned corrective actions The Hospital’s management and responsible officers agree with this finding. Please refer to the corrective action plan section for the Hospital’s response on pages 55-56.