Finding Text
FEDERAL PROGRAM (ALN 21.027) CORONAVIRUS STATE AND LOCAL RECOVERY FUNDS U.S. DEPARTMENT OF TREASURY AWARD NUMBER NOT AVAILABLE COMPLIANCE REQUIREMENT REPORTING TYPE OF FINDING NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY CRITERIA Per the Compliance and Reporting Guidance ? Part I: General Guidance ? Section D: Uniform Administrative Requirements ? Section 10: Reporting: establishes that: All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Recipients should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. In addition, where appropriate, recipients need to establish controls to ensure completion and timely submission of all mandatory performance and/or compliance reporting. STATEMENT OF CONDITION During the performance of our audit procedures regarding reporting, we obtained copies of the reports submitted for the periods of March to December 2021, January to March 2022 and April to June 2022 for the evaluation of the reporting requirements. Due to that the reports presented accumulated information, we selected the report for the period of April to June 2022 for reporting requirement evaluation. After the evaluation of the report and its supporting documentation we noticed the following situations: 1. In one of the projects the total amount of current period and cumulative obligations does not agree with the total amounts of obligations recognized in the accounting system for the same project and period. 2. In one of the projects the total current period and cumulative expenditures does not agree with the total amounts of expenditures recognized in the accounting system for the same project and period.. QUESTIONED COSTS Not Determined. PERSPECTIVE INFORMATION Condition 1: This was an isolated case in the accounting system were the purchase order balance does not reflect the expenditures incurred. No additional information was required when preparing the report to validate the reason because the purchase order balance was the same as originally reported although expenditures were incurred during the period related to the same project. In a subsequent report the total amount of obligations will be updated. Condition 2: For the next period report the involuntary error was identified and properly corrected to reflect the correct amounts in the report in accordance with the accounting records. STATEMENT OF CAUSE Condition 1: The personnel in charge of preparing the report used a worksheet to analyze the information to include in the report and by an error of the accounting system the purchase order balance at the end of the period was the same as originally reported. When the expenditures for the period were entered in the worksheet they were considered as new obligations and not as a reduction to the original purchase order amount.Condition 2: The personnel in charge of preparing the report used a worksheet to analyze the information to include in the report and by an involuntary error entered as total expenditures the total amount of obligations for the project causing that the amount reported as expenditures be greater than the amount in the accounting system. POSSIBLE ASSERTED EFFECT The information included in the reports does not agree with the Municipality accounting records. IDENTIFICATION OF REPEAT FINDING This is not a repeated Finding. RECOMMENDATIONS We recommend that the Municipality establish an adequate procedure to verify and trace the amounts included in the report to the amounts in the accounting records of the Municipality, by using more than one type of report from the accounting system so the personnel in charge of preparing the report can trace to more than one source of information that the amounts reported are in accordance with the accounting records.