Finding 962604 (2023-005)

MUNICIPALITY OF PATILLAS, PUERTO RICO SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2023 SECTION III – Federal Award Finding and Questioned Costs FINDING 2023-005 FEDERAL PROGRAM COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) (ASSISTANCE LISTING NO.14.228) DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT PASS THROUGH STATE HOUSING DEPARTMENT CATEGORY INTERNAL CONTROL/COMPLIANCE NONCOMPLIANCE PROCUREMENT AND SUSPENSION AND DEBARMENT CONDITIONS During our audits test we noted that the Municipality did not include the applicable clauses in two of the contracts as required by 2 CRF section 200.327. CRITERIA The contract for the delegation of funds between the Municipality and the Department of Housing of Puerto Rico establishes that the subrecipient must ensure that every contract to purchase goods and services paid with CDBG funds include the applicable contract clauses required by the 2 CFR section 200.327 appendix II. CAUSE The Municipal Secretary Office failed to take internal control measures to ensure that the contracts included all clauses required by applicable regulations. EFFECT The Municipality is in noncompliance with the applicable requirements. RECOMMENDATION The Municipal Secretary Office should implement adequate internal control procedures to ensure that the contracts contain all the clauses required by the federal regulation. QUESTIONED COST: None PRIOR YEAR Not Applicable