Finding 963246 (2023-002)

Finding Number 2023-002 Federal Agency: Pass-Through Agency: U.S. Department of the Treasury Puerto Rico Fiscal Agency and Financial Advisory Authority Program: Coronavirus State and Local Discal Recovery Funds (Assistance Listing No. 21.027) Compliance Requirement: Reporting – Special Reporting (L) Type Of Finding: Material Weakness (MW) / Instance of 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 Puerto Rico Fiscal Agency and Financial Advisory Authority, respectively. In our Reporting Test, we evaluated three monthly reports submitted to the Puerto Rico Fiscal Agency and Financial Advisory Authority. We found that the Municipality submitted two of the three reports late, but we noted that the reports were submitted consistently on time from March 2023 through June 2023. Also, we evaluated the annual Project and Expenditure Report submitted to the U.S. Department of Treasury. We determined that the report was submitted on time. 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, 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. Cause of Condition The Municipality does not have adequate monitoring for the activity and the reports. Effect of Condition The program is not in compliance with the Reporting Requirements as established in the contract agreement and guidelines. Recommendation The Municipality should establish a monitoring system to ensure compliance with requirements established by the pass-through agency such as submitting the reports during the 15th day of each month. Questioned Cost None Prior Year Findings No. Views of Responsible Officials and Planned Corrective Action We concur partially with the finding. The Municipality received strengthening funds, which require the filing of monthly reports, specifically on the 15th of each month. The Municipality acknowledges that it has not submitted certain reports specifically for the 15th of each month, however, they have been submitted monthly. The fact that the report was not submitted by a specific date is not synonymous with the municipality not adequately monitoring the program's activities. That is why we do not completely agree with what is stated in the cause of condition. To ensure that the report is submitted by the 15th of each month, since March 2023, a reminder with a notice was established in the calendar several days before the filing date. Implementation Date: Fiscal year 2023-2024 Responsible Person: CPA Marisol Rosa Acevedo Municipal Administrator