Finding Text
Finding Reference 2023-005
Federal Agency: U.S. Department of Homeland Security
Pass-Through Agency: Central Office of Recovery, Reconstruction and Resiliency of Puerto Rico (COR3)
Program: Disaster Grants – Public Assistance (Presidentially Declared Disaster) (ALN 97.036)
Compliance Requirement: Reporting (L)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC)
Statement of Condition In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of nine (9) projects for two quarters of fiscal year 2022-2023. During our audit procedures, we noted that the reports did not agree with the accounting and project records.
Criteria 2 CFR 200.302 (a) stated that the state’s and the other non-Federal entity’s financial management system, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award.
Also, 2 CFR 200.302 (b) (2) states that the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329.
Cause of Condition The Municipality accounting controls and procedures fail to ensure accurate, current and complete disclosure of the financial results of federal assisted activities.
Effect of Condition The expenses reported in the Quarterly Progress Reports do not agree with the accounting records.
Recommendation We recommend that Program Administrators to reconcile the differences between the quarterly report and the accounting records before the submission of the next submission to the pass-through entity.
Questioned Cost None
Prior Year Finding No Views of Responsible
Officials and Planned
Corrective Action We concur with the finding. Quarterly Progress Reports for large projects will be prospectively adjusted to reflect expenditures incurred over the reporting period
Implementation Date: March 31, 2025
Responsible Person: Belinda Álvarez
Finance Director