Finding 943874 (2022-009)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2024-02-14
Audit: 290434
Organization: Municipality of Utuado (PR)
Auditor: Torres Fred & CO

AI Summary

  • Core Issue: Contracts for FEMA disaster grants lacked required clauses, leading to potential noncompliance.
  • Impacted Requirements: Missing clauses include record retention, equal employment opportunity, and compliance with environmental and lobbying regulations.
  • Recommended Follow-Up: Implement stronger internal controls to ensure all future contracts meet FEMA requirements.

Finding Text

FINDING 2022-009 FEDERAL PROGRAM DISASTER GRANT-PUBLIC ASSISTANCE ( ASSISTANCE LISTING NO. 97.036) DEPARTMENT OF HOMELAND SECURITY CATEGORY INTERNAL CONTROL NONCOMPLIANCE PROCUREMENT-CONTRACT PROVISION CONDITIONS As part of our allowability test we verified if the contract contained the clauses required by FEMA. During our audit, we identified that the revised contracts did not contain the following required clauses: Retention of records for three years; Equal Employment Opportunity; Compliance with the Clean Air Act and Water Act; Compliance with Suspension and Debarment; Compliance with Byrd Anti Lobbying Amendment. CRITERIA 2 CFR, Section 200.327 states that the non-Federal entity's contracts must contain the applicable provisions described in appendix II, which includes the clauses mentioned above. CAUSE The Program Director and the City Clerk's Office failed to take internal control measures to ensure that FEMA-funded contracts included all clauses required by applicable regulations. EFFECT In case of noncompliance with the federal procurement rules, FEMA may apply a remedy, as appropriate, in accordance with its authorities found at 2 C.F.R. § 200.339 Remedies for Noncompliance. RECOMMENDATION The Program Director and the City Clerk’s Office should implement adequate internal control procedures to ensure that the contracts contain all the clauses required by FEMA. QUESTIONED COSTS None PRIOR YEAR Not Applicable VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION Corrective action was taken on contracts 2023 and beyond. The 2023 contracts already awarded were amended to include them and the new contracts that are being formalized in 2024 are including FEMA's mandatory clauses. RESPONSIBLE PERSON Mr. Jose González-Program Director 787-894-9191

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 367430 2022-007
    Material Weakness Repeat
  • 367431 2022-008
    Material Weakness
  • 367432 2022-009
    Significant Deficiency
  • 943872 2022-007
    Material Weakness Repeat
  • 943873 2022-008
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.600 Head Start $7.04M
97.030 Community Disaster Loans $1.65M
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.52M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $1.16M
14.871 Section 8 Housing Choice Vouchers $1.13M
93.356 Head Start Disaster Recovery $1.11M
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $966,295
21.019 Coronavirus Relief Fund $357,168
14.231 Emergency Solutions Grant Program $278,131
10.558 Child and Adult Care Food Program $191,557
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $170,212
16.034 Coronavirus Emergency Supplemental Funding Program $66,402