Finding Text
FINDING NUMBER 2024-004
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 (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 evaluated two (2) quarterly Project and Expenditure Reports submitted to U.S. Department of Treasury, three (3) monthly reports related to the Municipal Strengthening Funds Program and six (6) bimonthly reports related to the Solid Waste Landfill Program.
We found that three (3) of six (6) Solid Waste Landfill Program Reports were submitted late, and two (2) of three (3) Municipal Strengthening Funds Reports were not submitted to 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.
The instructions of the Solid Waste Landfill Reports, provided by the Fiscal Agency and Financial Advisory Authority, establish that the report must be updated and submitted before the first and third Friday of each month (bimonthly), starting at the date of the agreement.
The U.S. Department of Treasury also established guidelines for the reporting requirements of the funds received as an Entitlement and County Unit 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 timely. This will ensure better control for the program.
QUESTIONED COST None.
PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings and Questioned Costs (2023-004 and 2022-006).
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION We concur with the auditors’ finding. The Finance Director is aware of the compliance requirement. We gave instructions to the accounting staff to maintain a dateline control sheet to ascertain that required reports for all grants were submitted within the due date.
Implementation Date: Fiscal Year 2024-2025.
Responsible Person: Aracelis Suárez, Finance Director