Finding Text
FINDING NUMBER 2023-004
FEDERAL AGENCY U.S. DEPARTMENT OF THE TREASURY
PASS-THROUGH AGENCY P.R. DEPARTMENT OF TREASURY - PUERTO RICO FISCAL
AGENCY AND FINANCIAL ADVISORY AUTHORITY
FEDERAL PROGRAM CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY
FUNDS (ALN 21.027)
REQUIREMENT REPORTING – SPECIAL REPORTING (L)
TYPE OF FINDING SIGNIFICANT DEFICIENCY (SD) / NONCOMPLIANCE (NC)
CONDITION During the fiscal year, the Municipality administered funds from the
Coronavirus State and Local Fiscal Recovery Funds. This allocation
was granted directly from the Federal government and through the
Puerto Rico Fiscal Agency and Financial Advisory Authority,
respectively. In our Reporting Test, we found that the Municipality did
not comply with the monthly compliance reporting requirements
established by the Puerto Rico Fiscal Agency and Financial Advisory
Authority.
CRITERIA The Municipal Strengthening Fund Transfer Agreement, Clause 5.1,
states 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 Agreement, and such
reports shall be in such form, with such content, as specified by the
transferor in the transfer plan and future program instructions directed
to all recipients.
The Transfer Plan, on Exhibit A, establishes that starting on the 15th
day of the month following receipt of the funds, and by the 15th day of
each month, the Transferee will submit a Use of Funds Report for the
prior month’s expenses. Also, on the Municipal Strengthening Fund
Program Guidelines, the Puerto Rico Fiscal Agency and Financial
Advisory Authority specified on the Reporting Requirements Section
that the recipients are required to submit monthly financial reports
using the reporting template provided by the program.
During the fiscal year 2022-2023, in addition to the contract agreement
with the Puerto Rico Fiscal Agency and Financial Advisory Authority,
the Municipality signed an agreement with the US Department of
Treasury to receive direct funds as an Entitlement and County Unit.
Those transfer agreements also established reporting requirements that
we determined that the Municipality was in compliance.
CAUSE There is a lack of knowledge and training to personnel assigned.
Additionally, the Municipality does not have an adequate monitoring
for the activity and the reports.
EFFECT The program is not in compliance with the Reporting Requirements as
established in the transfer agreement.
RECOMMENDATION We recommend training for the authorized personnel who administer
the program, to better understand the reporting requirements and
develop complete and accurate reports. The Municipality should
establish a monitoring system to ensure compliance with requirements
established by the passthrough agency such as: submitting the reports
during the 15th day of each month, where the fund expenses of the
previous month will be reported as incurred. This will ensure better
control for the program.
QUESTIONED COST None
PRIOR YEAR FINDING A similar finding was presented in prior year Schedule of Findings
and Questioned Costs (2022-006)
VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION We concur with the auditor’s finding. The Finance Department staff
is aware about the compliance requirement, and instructions were
given to the accounting staff to maintain a dateline control sheet to
ascertain that required reports were submitted within the due date.
Implementation Date: Fiscal Year 2023-2024
Responsible Person: Kristian Rivera Santiago
Finance Director