Finding Text
SECTION III ? FEDERAL AWARD FINDINGS AND QUESTIONED COSTS _____________________________________________________________________________________________________________________ FINDING NUMBER 2022-006 FEDERAL PROGRAM CORONAVIRUS RELIEF FUND (ASSISTANCE LISTING NUMBER 21.019) PASS-THROUGH PUERTO RICO FISCAL AGENCY AND FINANCIAL ADVISORY AUTHORITY U.S. DEPARTMENT OF THE TREASURY AWARD NUMBER TRANSFER AGREEMENTS PHASES I/ II/ III TYPE OF FINDING COMPLIANCE AND INTERNAL CONTROL COMPLIANCE REQUIREMENT REPORTING CONDITION As part of the reporting test, the final accumulated expenditures report submitted to the pass-through entity was examined. I noted that the Municipality reported the amount of $2,069,123 in the final accumulated expenditures report, which is $147,992 less than the amount of expenditures recorded in the accounting records of the Municipality. CRITERIA As established in the Uniform Guidance, 2 CFR Section 200.302, Financial Management, (a) the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Also, Clause 2.3, Recordkeeping, of the Coronavirus Relief Fund (CRF) Transfer Agreement for the Assistance Program to Municipalities, established that the Transferee will maintain its books and records in a manner that will provide Transferor with sufficient detail to review Transferee?s receipts and expenditures relating to the Transfer. Transferee will make such records available for review by Transferor or its agent or designee upon reasonable notice during the Transfer period and for five (5) years after the termination or expiration of this Agreement. Also, Clause 5.1, Compliance Reporting Requirements, of the Coronavirus Relief Fund (CRF) Transfer Agreement for the Assistance Program to Municipalities, established 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, and such reports shall be in such form, which such content, as specified by the Transferor in the Transfer Plan and future program instructions directed to all Recipients. CAUSE The Municipality?s internal controls and procedures failed to ensure the accuracy and correctness of the reports submitted to the pass-through entity. EFFECT Possible inaccurate financial information could have been submitted to the pass-through entity that can lead the Municipality to be in noncompliance with the reporting requirements established in the transfer agreements. RECOMMENDATION I recommend the Municipality to continue strengthening the internal controls and monitoring procedures to ensure the accuracy and completeness of accounting records and the correct preparation and timely submission of the financial reports. QUESTIONED COSTS None PRIOR YEAR FINDING This finding is a prior year audit finding identified as 2021-005. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION We gave instructions to the finance department accounting staff to strengthening internal procedures and controls to ensure accurate preparation and submission of financial reports.