Finding Text
Finding Reference 2023-003
Federal Agency: U.S. Department of Treasury
Pass-Through Agency: Puerto Rico Fiscal Agency and Financial Advisory Authority
Program: Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing No. 21.027)
Compliance Requirement: Reporting (L)
Type of Finding: Significant Deficiency (SD), Instance of Noncompliance (NC)
Statement of 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.
Cause of Condition The Municipality does not have the necessary personnel assigned to prepare and present reports in a timely manner.
Effect of Condition 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 prepare timely 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 of the program. Questioned Cost None
Prior Year Finding No
Views of Responsible
Officials and Planned
Corrective Action We concur with the finding. The personnel in charge of completing the reports understand the reporting requirements. The report that was submitted with the longest delay was due to the fact that we were dealing with Hurricane Fiona and subsequent rain events. We will be reinforcing the accounting area to assign additional personnel who can collaborate in the preparation of these reports within the stipulated time.
Implementation Date: March 31, 2025
Responsible Person: Belinda Álvarez
Finance Director