Finding 967641 (2023-002)

-
Requirement
F
Questioned Costs
-
Year
2023
Accepted
2024-04-01

AI Summary

  • Core Issue: The current capitalization threshold for property and equipment acquired with CDBG-DR funds is set at $1,000, which does not meet the required $500 threshold established by the Puerto Rico Department of Housing.
  • Impacted Requirements: This discrepancy violates the Finance Policies for administering CDBG-DR funds, leading to improper expensing of eligible property and equipment.
  • Recommended Follow-Up: Management should revise the capitalization policy to align with the $500 threshold and update the finance manual by June 30, 2024.

Finding Text

Criteria: Finance Policies to Administer CDBG-DR established by the Puerto Rico Department of Housing in its Chapter 15 Section 2, requires that-sub recipients must capitalize property and equipment with a cost of $500 or more. Condition: The capitalization threshold used for property and equipment acquired with CDBG funds is not in compliance with Finance Policies to administer CDBG-DR funds, as established by the Puerto Rico Department of Housing. SECTION III –FEDERAL AWARD FINDINGS AND QUESTIONS COSTS Cause: The capitalization policy followed by BGCPR is to capitalize property and equipment with a cost of $1,000 or more. Effect or potential effect: Property and equipment acquired with CDBG-DR funds is being expensed instead of capitalized. Recommendation: We recommend that management updates its capitalization policy to include this specific requirement for property and equipment acquired with CDBG-DR funds. Views of responsible officials: Management will add a capitalization procedure for this program to its finance manual and make the adjustments in the property land equipment subsidiary. Expected completion date is June 30, 2024.

Categories

Subrecipient Monitoring Equipment & Real Property Management

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.850 Public and Indian Housing $2.08M
84.287 Twenty-First Century Community Learning Centers $1.50M
93.600 Head Start $426,902
17.274 Youthbuild $325,534
14.218 Community Development Block Grants/entitlement Grants $292,934
10.555 National School Lunch Program $179,272
84.282 Charter Schools $172,010
10.536 Cacfp Training Grants $167,589
93.086 Healthy Marriage Promotion and Responsible Fatherhood Grants $158,141
94.006 Americorps $142,661
93.356 Head Start Disaster Recovery $142,395
16.575 Crime Victim Assistance $43,554
93.859 Biomedical Research and Research Training $29,682
21.027 Coronavirus State and Local Fiscal Recovery Funds $23,685
10.553 School Breakfast Program $21,678
93.060 Competitive Abstinence Education (cae) $17,624
16.726 Juvenile Mentoring Program $16,888
14.862 Indian Community Development Block Grant Program $5,148