Finding Text
FINDING NUMBER 2024-006
FEDERAL AGENCY U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
PASS-THROUGH AGENCY P.R. DEPARTMENT OF FAMILY
FEDERAL PROGRAM CHILD CARE AND DEVELOPMENT BLOCK GRANT
(ALN 93.575)
REQUIREMENT EARMARKING (G)
TYPE OF FINDING SIGNIFICANT DEFICIENCY (SD) / NONCOMPLIANCE (NC)
CONDITION In our Earmarking Test, we found that the Program did not comply with the quality earmark limitation that requires the program to spend at least nine percent (9%) of the funds on quality activities and at least an additional three percent (3%) on quality improvement for infants and toddlers on the program.
CRITERIA 45 CFR, Subpart F, Section 98.50 (b) (1) states that of the aggregate amount of funds expended by a State or Territory was no less than seven percent in fiscal years 2016 and 2017, eight percent in fiscal years 2018 and 2019, and nine percent in fiscal year 2020 and each succeeding fiscal year shall be used for activities designed to improve the quality of child care services and increase parental options for, and access to, high-quality child care as described at 45 CFR Subpart F, Section 98.53. Section 98.50 (b) (2) states that no less than three percent in fiscal year 2017 and each succeeding fiscal year shall be used to carry out activities as such activities relate to the quality of care for infants and toddlers. Also, section 98.50 (b) (3) states that nothing in this section shall preclude the State or Territory from reserving a larger percentage of funds to carry out activities described in paragraphs (b) (1) and (2) of Section 98.50.
CAUSE The program’s budget, approved by the pass-through entity, was not distributed according to the cost limitations required for the administrative, quality and direct costs. Therefore, the amounts spent per category of expenditure did not meet the minimum amounts.
EFFECT The program is not in compliance with 45 CFR, Subpart F, Section 98.50.
RECOMMENDATION We recommend the Program’s Management to request to the pass-through entity a revision of the approved budgeted amounts in order to make all the required adjustments to comply with the program cost limitations.
QUESTIONED COST None.
PRIOR YEAR FINDING No.
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION We concur with the finding. As part of the corrective action plan, we evaluated the approved budget by the pass-through entity for the current fiscal year (2024-2025). From the evaluation we validated that the amount assigned for the Quality Activities Category is 14.58% and the amount assigned for the Quality Infant and Toddler Category is a 5.43% from total approved budget. Therefore, the current approved budget complies with the minimum percentage required by the federal regulation of 9% and 3%, respectively. In addition, we will be evaluating the budget for the proposal of the program year 2025-2026 in order to be in compliance with federal regulation. For general knowledge, we want to make clear that the pass-through agency hasn’t made this questioning because it is the entity that approves the assigned funds.
Implementation Date: Fiscal Year 2024-2025.
Responsible Person: Eileen Rosario, Program Director