Finding Text
FINDING NUMBER: 2022-006 FEDERAL AGENCY: U.S. DEPARTMENT OF THE TREASURY PASS-THROUGH AGENCY: P.R. DEPARTMENT OF TREASURY - PUERTO RICO FISCAL AGENCY AND FINANCIAL ADVISORY AUTHORITY FEDERAL PROGRAM: CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS (ALN 21.027) REQUIREMENT: REPORTING ? SPECIAL REPORTING (L) TYPE OF FINDING: SIGNIFICANT DEFICIENCY (SD) / NONCOMPLIANCE (NC) CONDITION: During the fiscal year, the Municipality administered funds from the Coronavirus State and Local Fiscal Recovery Funds. This allocation was granted directly from the Federal government and through the Puerto Rico Fiscal Agency and Financial Advisory Authority, respectively. In our Reporting Test, we found that the Municipality did not comply with the monthly compliance reporting requirements established by the Puerto Rico Fiscal Agency and Financial Advisory Authority. CRITERIA: The Municipal Strengthening Fund Transfer Agreement, Clause 5.1, states that the transferee shall submit reports as the transferor determines are needed to verify use of the funds and compliance with conditions that are imposed on the Transfer Agreement, and such reports shall be in such form, with such content, as specified by the transferor in the transfer plan and future program instructions directed to all recipients. The Transfer Plan, on Exhibit A, establishes that starting on the 15th day of the month following receipt of the funds, and by the 15th day of each month, the Transferee will submit a Use of Funds Report for the prior month?s expenses. Also, on the Municipal Strengthening Fund Program Guidelines, the Puerto Rico Fiscal Agency and Financial Advisory Authority specified on the Reporting Requirements Section that the recipients are required to submit monthly financial reports using the reporting template provided by the program. During the fiscal year 2021-2022, in addition to the contract agreement with the Puerto Rico Fiscal Agency and Financial Advisory Authority, the Municipality signed an agreement with the US Department of Treasury to receive funds direct funds as an Entitlement and County Unit. Those transfer agreements also established reporting requirements that we determined that the Municipality was in compliance. CAUSE: There is a lack of knowledge and training to personnel assigned. Additionally, the Municipality does not have an adequate monitoring for the activity and the reports. EFFECT: The program is not in compliance with the Reporting Requirements as established in the transfer agreement. RECOMMENDATION: We recommend training for the authorized personnel who administer the program, to better understand the reporting requirements and develop complete and accurate reports. The Municipality should establish a monitoring system to ensure compliance with requirements established by the passthrough agency such as: submitting the reports during the 15th day of each month, where the fund expenses of the previous month will be reported as incurred. This will ensure better control for the program. QUESTIONED COST: None PRIOR YEAR FINDING: None VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION: We concur with the auditor?s finding. The Finance Director is aware about the compliance requirement. We gave instructions to the accounting staff to maintain a dateline control sheet to ascertain that required reports were submitted within the due date. Implementation Date: April 30, 2023 Responsible Person: Kristian Rivera Santiago Finance Director