Finding 520280 (2022-003)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2025-01-27
Audit: 339937
Organization: Municipality of Morovis (PR)

AI Summary

  • Core Issue: The Municipality failed to provide certified reports needed to demonstrate compliance with federal award requirements.
  • Impacted Requirements: Lack of reconciliations between submitted reports and the official accounting system raises concerns about accuracy and compliance.
  • Recommended Follow-Up: Ensure that all necessary documentation is prepared and certified to verify compliance with grant reporting requirements.

Finding Text

The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. According to an analysis of the related transactions prepared by the Municipality’s consultants for financial statements and Schedule of Expenditures of Federal Awards purposes for the fiscal year ended June 30, 2021, $1,082,613 has been expended or transferred to the general fund to cover eligible expenses under the terms allowed by the CDL grant. As a consequence of these conditions, compliance with reporting requirements established by the grantor entity, and related internal controls, could not be verified.

Corrective Action Plan

We concur with the finding. The pandemic cause by the outbreak of COVID 19 disrupted a delayed many accounting and reporting processes during the fiscal year 2020 and 2021 since the Municipality had to shut down operations for various months. Consequently, several projects and tasks calendarized were postponed or delayed, including certain reports and controls required by the Federal Regulations. As of the date of this Corrective Action Plan, the transaction detail of CDL cost incurred on fiscal year ending on June30, 2021 was produced, under alternate methods, from the Finances Department’s accounting system and submitted to the external auditor.

Categories

Reporting

Other Findings in this Audit

  • 520278 2022-004
    Significant Deficiency Repeat
  • 520279 2022-004
    Significant Deficiency Repeat
  • 520281 2022-004
    Significant Deficiency Repeat
  • 1096720 2022-004
    Significant Deficiency Repeat
  • 1096721 2022-004
    Significant Deficiency Repeat
  • 1096722 2022-003
    Material Weakness Repeat
  • 1096723 2022-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $7.40M
97.030 Community Disaster Loans $2.80M
21.019 Coronavirus Relief Fund $1.56M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $1.22M
93.575 Child Care and Development Block Grant $837,927
14.871 Section 8 Housing Choice Vouchers $399,416
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $394,694
10.558 Child and Adult Care Food Program $63,952