Finding Text
Finding Reference 2023-003
Federal Agency: U.S. Department of Homeland Security
Pass-through
Agency: Central Office of Recovery, Reconstruction and Resiliency of Puerto Rico (COR3)
Federal Emergency Management Agency (FEMA)
Program: Disaster Grants – Public Assistance (Presidentially Declared Disaster
(ALN 97.036)
Compliance
Requirement: Reporting (L)
Type of Finding: Significant Deficiency in Internal Controls (SD), Instance of Noncompliance (NC)
Statement of Condition In our Reporting Test, we evaluated the Quarterly Progress Reports of a total of eleven (11) projects for two quarters of fiscal year 2022-2023. During our audit procedures, we noted that the reports did not agree with the accounting and project records.
Criteria 2 CFR 200.302 (a) states that the state's and the other 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, 2 CFR 200.302 (b) (2) states that the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329.
Cause of Condition The Municipality accounting controls and procedures fail to ensure accurate, current and complete disclosure of the financial results of federal assisted activities.
Effect of Condition The expenses reported in the Quarterly Progress Reports do not agree with the accounting records.
Recommendation We recommend the Program Administrators to reconcile the differences between the quarterly report and the accounting records before the submission of the next submission to the pass-through entity.
Questioned Cost None
Views of Responsible Officials and Planned Corrective Actions The QPR Reports for the months from January to March 2023, were completed by the previous POC Recovery Office. We understand that expenses were reported in the QPR on the date when the certification with the contractor´s invoice was received at the Secretary of Engineering and Conservation of Infrastructure and not on the date of payment or disbursement of the invoice. For example, if the invoice was received in the month of February, the expense was recorded in the QPR from January to March even though it was not paid until the month of April.
We are verifying each project reported in the QPR against the amount reported at the SIMA System. We expect to have updated and correct information for all the Quarterly Progress Reports for the period from January to March 2024.
Implementation Date: Fiscal Year 2023-2024.
Responsible Person: Dafne L. Claudio Sánchez, Accountant