Finding 529920 (2024-007)

Significant Deficiency

Requirement

Questioned Costs

Year

2024

Accepted

2025-03-25

Audit: 347991

Organization: Municipality of Naranjito (PR)

Auditor: Lopez Vega CPA Psc

AI Summary

Core Issue: The Program failed to submit required annual closing reports to the pass-through agency, violating contract terms.
Impacted Requirements: Noncompliance with 45 CFR Part 98.67 regarding fiscal control and timely reporting.
Recommended Follow-Up: Management should ensure timely submission of financial reports and monitor internal controls to prevent future issues.

Finding Text

Finding Reference 2024-007 Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: Puerto Rico Department of Family Program: Child Care and Development Block Grant (ALN 93.575) Compliance Requirement: Reporting (L) Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC) Statement of Condition During our audit procedures, we noted that the Program did not submit the annual closing reports to the pass-through entity, as required by the contract agreement. Criteria 45 CFR Part 98.67 (c) Fiscal control and accounting procedures shall be sufficient to permit: (1) Preparation of reports required by the Secretary under this subpart and under subpart H; and (2) The tracing of funds to a level of expenditure adequate to establish that such funds have not been used in violation of the provisions of this part. Also, the contract agreement states in Clause thirteen (13) that the Municipality is responsible for the presentation of the trial balance and annual partial closing report fifteen (15) calendar days after the end of the contract. Ninety (90) days after, the Municipality should liquidate all obligations and present to the pass-through entity the final annual closing report (CC-006). Cause of Condition The Program does not have effective internal controls to ensure that the required reports and supporting documentation are submitted to the pass-through agency in the requested time frame. Effect of Condition The Program is not in compliance with 45 CFR Part 98.67 Fiscal Requirements (c) (1) (2). Recommendation Management should take the necessary steps to ensure that the Program submits its financial reports within the time frame required by the state pass-through agency. Questioned Cost None. Prior Year Finding No. Views of Responsible Officials and Planned Corrective Action We concur with the finding. The Municipality appointed a person to work on all the required reports and instructed them on the deadlines that apply; once all reports are submitted, evidence will be provided. Implementation Date: June 30, 2025 Responsible Person: Carmen I. López Interim Finance Director

Corrective Action Plan

COMMONWEALTH OF PUERTO RICO CORRECTIVE ACTION PLAN MUNICIPALITY OF NARANJITO FOR THE FISCAL YEAR ENDED JUNE 30, 2024 Audit Report: Reports on Compliance and Internal Control in Accordance with Government Auditing Standards and 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Audit Period: July 1, 2023 – June 30, 2024 Fiscal Year: 2023-2024 Principal Executive: Hon. Orlando Ortíz Chevres - Mayor Contact Person: Mrs. Carmen López, Interim Finance Director Phone: (787) 869 – 2200 Original Finding Number: 2024-007 Statement of Concurrence or Nonconcurrence: We concur with the finding. Corrective Action : The Municipality appointed a person to work on all the required reports and instructed them on the deadlines that apply; once all reports are submitted, evidence will be provided. Implementation Date: June 30, 2025 Responsible Person: Carmen I. López – Interim Finance Director

Other Findings in this Audit

529914 2024-003

Significant Deficiency Repeat
529915 2024-003

Significant Deficiency Repeat
529916 2024-004

Significant Deficiency Repeat
529917 2024-004

Significant Deficiency Repeat
529918 2024-005

Significant Deficiency Repeat
529919 2024-006

Significant Deficiency
1106356 2024-003

Significant Deficiency Repeat
1106357 2024-003

Significant Deficiency Repeat
1106358 2024-004

Significant Deficiency Repeat
1106359 2024-004

Significant Deficiency Repeat
1106360 2024-005

Significant Deficiency Repeat
1106361 2024-006

Significant Deficiency
1106362 2024-007

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
97.036	Disaster Grants - Public Assistance (presidentially Declared Disasters)	$7.18M
21.027	Coronavirus State and Local Fiscal Recovery Funds	$1.17M
93.575	Child Care and Development Block Grant	$1.12M
14.871	Section 8 Housing Choice Vouchers	$1.06M
93.044	Special Programs for the Aging, Title Iii, Part B, Grants for Supportive Services and Senior Centers	$185,070
93.569	Community Services Block Grant	$90,158
16.575	Crime Victim Assistance	$76,326
14.228	Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii	$56,080
93.053	Nutrition Services Incentive Program	$42,433
16.710	Public Safety Partnership and Community Policing Grants	$30,311
10.558	Child and Adult Care Food Program	$29,617
66.818	Brownfields Multipurpose, Assessment, Revolving Loan Fund, and Cleanup Cooperative Agreements	$197