FAC Explorer

Finding 968867 (2022-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2024-04-05
Audit: 302752
Organization: Puerto Rico Safe Drinking Water Treatment Revolving Loan Fund (PR)
Auditor: Aquino De Cordova LLC

AI Summary

  • Core Issue: PRDH lacks effective internal controls and timely reconciliation processes, leading to inaccurate financial reporting.
  • Impacted Requirements: Non-compliance with federal regulations on financial management, including reporting and accounting standards.
  • Recommended Follow-Up: PRDH should enhance accounting software use, establish clear policies for reconciliations, and provide training for staff on financial reporting practices.

Finding Text

Criteria 45 CFR, Part 74, Subpart C, Section 74.21; 7 CFR, Part 3016, Subpart C, Section 3016.20 establishes the following: a) A State must expend and account for grant funds in accordance with State Laws and procedures for expending and accounting for its own funds. Fiscal control and accounting procedures of the State, as well as its sub-grantees and cost-type contractors, must be sufficient to: 1. Allow preparation of reports required by this part and the statutes authorizing the grant, and 2. Allow the tracing of funds to a level of expenditure adequate to establish that such funds have not been used in violation of the restrictions and prohibitions of applicable statutes. b) The financial management systems of the grantees and sub-grantees must meet the following standards: 1. Financial reporting - Accurate, current, and complete disclosure of the financial results of financially assisted activities must be made in accordance with the financial reporting requirements of the grant or sub-grant. 2. Accounting records - Grantees and sub-grantees must maintain records that adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or sub-grant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income. 3. Internal control - Effective control and accountability must be maintained for all grant and sub-grant cash, real and personal property, and other assets. Grantees and sub-grantees must adequately safeguard all such property and must ensure that it is used solely for authorized purposes. 4. Budget control - Actual expenditures or outlays must be compared with budgeted amounts for each grant or sub-grant. Financial information must be related to performance or productivity data, including the development of unit cost information whenever appropriate or specifically required in the grant or sub-grant agreement. If unit cost data are required, estimates based on available documentation will be accepted, whenever possible. 5. Source documentation - Accounting records must be supported by such source documentation as cancelled checks, paid bills, payrolls, time and attendance records, contract and sub-grant award documents, etc. Condition During our audit procedures for the fiscal year ended June 30, 2022, we noted the following deficiencies related with the accounting procedures and financial reporting practices of the PRDH: a) The PRDH has inappropriate and/or incomplete cut-off procedures, as well as incomplete month-end and year-end reconciliation and closing procedures which prevent the timely processing of adjustments. Many transactions and adjustments are posted months after the applicable closing with a retroactive effect due to delays in the processing of information, especially those related to payroll transactions. b) During our audit procedures related to compliance with the reporting requirements, we noted that the Finance Department does not reconcile, on a timely basis, the accounting transactions recorded in their system with the subsidiary ledger and reports prepared by the federal programs administration. Cause PRDH management has not implemented effective internal controls to ensure a reliable accounting system to accurately account for funds administered. Also, is caused by the lack of analysis of financial transactions recorded during the fiscal year and the lack of monitoring and supervision by the PRDH's management. Effect The PRDH is unable to prepare accurate and complete financial reports on a timely basis. Due to significant reconciliation efforts, report may contain significant errors that may pass undetected. Questioned Costs None Perspective Information Finding represents a significant problem. The Department of Health must plan to improve accounting and financial reporting practices. Prior Year Audit Finding 2021-001 Recommendation PRDH should evaluate their current accounting and financial reporting software to ensure that the PRDH maximizes its use, establishment or revision of policies and procedures, establishment of periodic reconciliation and analysis of accounting transactions and additional training to accounting personnel related to accounting and financial reporting matters, including year-end closing procedures. Views of Responsible Officials The PRDOH partially agrees with the finding. However, PRDOH has implemented various corrective actions. Regarding Project Costing Module, the PRDOH already has implemented the Travel and Expenses Module, Payment Management System, which integrates with the Account Receivable to streamline revenue records and Payroll Solutions. The effectiveness of these will be observed during the fiscal year 2024-2025. Also, the PRDOH and Central Government are currently working on ERP implementation in all Government Agencies. This new ERP will be in place in the fiscal year 2024-2025. Furthermore, the PRDOH has established control in order for all program to ensure the timely performed reconciliations between the finance office, the federal affair office, this procedure has started since august 2022. In the other hand the State Department of Treasury has begun a series of training with regard the new ERP that will, be in place by July 2024. This new system, in order to close the monthly period all programs will need to reconcile first before closing of the period. Responsible Officials Mrs. Velmary Martinez Yace Finance Director Tel. 787-765-2929 ext. 3291 Mrs. Mayra Reyes Accounting Office Supervisor Tel. 787-765-2929 ext. 3294 Estimated Completion Date October, 2025, for project implementation.

Categories

Subrecipient Monitoring Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 392413 2022-001
    Material Weakness Repeat
  • 392414 2022-001
    Material Weakness Repeat
  • 392415 2022-001
    Material Weakness Repeat
  • 392416 2022-001
    Material Weakness Repeat
  • 392417 2022-001
    Material Weakness Repeat
  • 392418 2022-001
    Material Weakness Repeat
  • 392419 2022-001
    Material Weakness Repeat
  • 392420 2022-001
    Material Weakness Repeat
  • 392421 2022-001
    Material Weakness Repeat
  • 392422 2022-001
    Material Weakness Repeat
  • 392423 2022-001
    Material Weakness Repeat
  • 392424 2022-001
    Material Weakness Repeat
  • 392425 2022-001
    Material Weakness Repeat
  • 392426 2022-001
    Material Weakness Repeat
  • 392427 2022-001
    Material Weakness Repeat
  • 392428 2022-002
    Significant Deficiency Repeat
  • 392429 2022-002
    Significant Deficiency Repeat
  • 392430 2022-002
    Significant Deficiency Repeat
  • 392431 2022-002
    Significant Deficiency Repeat
  • 392432 2022-002
    Significant Deficiency Repeat
  • 392433 2022-002
    Significant Deficiency Repeat
  • 392434 2022-002
    Significant Deficiency Repeat
  • 392435 2022-002
    Significant Deficiency Repeat
  • 392436 2022-002
    Significant Deficiency Repeat
  • 392437 2022-002
    Significant Deficiency Repeat
  • 392438 2022-002
    Significant Deficiency Repeat
  • 392439 2022-002
    Significant Deficiency Repeat
  • 392440 2022-002
    Significant Deficiency Repeat
  • 392441 2022-002
    Significant Deficiency Repeat
  • 392442 2022-002
    Significant Deficiency Repeat
  • 392443 2022-003
    Significant Deficiency
  • 392444 2022-003
    Significant Deficiency
  • 392445 2022-004
    Material Weakness Repeat
  • 392446 2022-005
    Material Weakness Repeat
  • 392447 2022-006
    Material Weakness Repeat
  • 392448 2022-006
    Material Weakness Repeat
  • 392449 2022-006
    Material Weakness Repeat
  • 392450 2022-006
    Material Weakness Repeat
  • 392451 2022-007
    Material Weakness
  • 392452 2022-007
    Material Weakness
  • 392453 2022-007
    Material Weakness
  • 392454 2022-007
    Material Weakness
  • 392455 2022-008
    Material Weakness
  • 392456 2022-008
    Material Weakness
  • 392457 2022-008
    Material Weakness
  • 392458 2022-008
    Material Weakness
  • 392459 2022-008
    Material Weakness
  • 392460 2022-008
    Material Weakness
  • 392461 2022-008
    Material Weakness
  • 392462 2022-008
    Material Weakness
  • 392463 2022-008
    Material Weakness
  • 392464 2022-008
    Material Weakness
  • 392465 2022-008
    Material Weakness
  • 392466 2022-008
    Material Weakness
  • 392467 2022-008
    Material Weakness
  • 392468 2022-008
    Material Weakness
  • 392469 2022-008
    Material Weakness
  • 968855 2022-001
    Material Weakness Repeat
  • 968856 2022-001
    Material Weakness Repeat
  • 968857 2022-001
    Material Weakness Repeat
  • 968858 2022-001
    Material Weakness Repeat
  • 968859 2022-001
    Material Weakness Repeat
  • 968860 2022-001
    Material Weakness Repeat
  • 968861 2022-001
    Material Weakness Repeat
  • 968862 2022-001
    Material Weakness Repeat
  • 968863 2022-001
    Material Weakness Repeat
  • 968864 2022-001
    Material Weakness Repeat
  • 968865 2022-001
    Material Weakness Repeat
  • 968866 2022-001
    Material Weakness Repeat
  • 968868 2022-001
    Material Weakness Repeat
  • 968869 2022-001
    Material Weakness Repeat
  • 968870 2022-002
    Significant Deficiency Repeat
  • 968871 2022-002
    Significant Deficiency Repeat
  • 968872 2022-002
    Significant Deficiency Repeat
  • 968873 2022-002
    Significant Deficiency Repeat
  • 968874 2022-002
    Significant Deficiency Repeat
  • 968875 2022-002
    Significant Deficiency Repeat
  • 968876 2022-002
    Significant Deficiency Repeat
  • 968877 2022-002
    Significant Deficiency Repeat
  • 968878 2022-002
    Significant Deficiency Repeat
  • 968879 2022-002
    Significant Deficiency Repeat
  • 968880 2022-002
    Significant Deficiency Repeat
  • 968881 2022-002
    Significant Deficiency Repeat
  • 968882 2022-002
    Significant Deficiency Repeat
  • 968883 2022-002
    Significant Deficiency Repeat
  • 968884 2022-002
    Significant Deficiency Repeat
  • 968885 2022-003
    Significant Deficiency
  • 968886 2022-003
    Significant Deficiency
  • 968887 2022-004
    Material Weakness Repeat
  • 968888 2022-005
    Material Weakness Repeat
  • 968889 2022-006
    Material Weakness Repeat
  • 968890 2022-006
    Material Weakness Repeat
  • 968891 2022-006
    Material Weakness Repeat
  • 968892 2022-006
    Material Weakness Repeat
  • 968893 2022-007
    Material Weakness
  • 968894 2022-007
    Material Weakness
  • 968895 2022-007
    Material Weakness
  • 968896 2022-007
    Material Weakness
  • 968897 2022-008
    Material Weakness
  • 968898 2022-008
    Material Weakness
  • 968899 2022-008
    Material Weakness
  • 968900 2022-008
    Material Weakness
  • 968901 2022-008
    Material Weakness
  • 968902 2022-008
    Material Weakness
  • 968903 2022-008
    Material Weakness
  • 968904 2022-008
    Material Weakness
  • 968905 2022-008
    Material Weakness
  • 968906 2022-008
    Material Weakness
  • 968907 2022-008
    Material Weakness
  • 968908 2022-008
    Material Weakness
  • 968909 2022-008
    Material Weakness
  • 968910 2022-008
    Material Weakness
  • 968911 2022-008
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.778 Medical Assistance Program $2.97B
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children $150.77M
93.767 Children's Health Insurance Program $111.87M
93.917 Hiv Care Formula Grants $27.92M
93.994 Maternal and Child Health Services Block Grant to the States $13.34M
10.578 Wic Grants to States (wgs) $6.36M
93.069 Public Health Emergency Preparedness $6.16M
93.966 The Zika Health Care Services Program $4.32M
93.889 National Bioterrorism Hospital Preparedness Program $3.13M
84.181 Special Education-Grants for Infants and Families $2.86M
93.268 Immunization Cooperative Agreements $2.75M
93.991 Preventive Health and Health Services Block Grant $2.41M
93.110 Maternal and Child Health Federal Consolidated Programs $1.84M
93.136 Injury Prevention and Control Research and State and Community Based Programs $1.83M
93.235 Affordable Care Act (aca) Abstinence Education Program $1.59M
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $1.44M
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $1.39M
93.977 Preventive Health Services_sexually Transmitted Diseases Control Grants $1.28M
93.255 Children's Hospitals Graduate Medical Education Payment Program $1.04M
93.377 Prevention and Control of Chronic Disease and Associated Risk Factors in the U.s. Affiliated Pacific Islands, U.s. Virgin Islands, and P. R. (b) $902,678
93.777 State Survey and Certification of Health Care Providers and Suppliers (title Xviii) Medicare $876,845
66.468 Capitalization Grants for Drinking Water State Revolving Funds $792,740
93.870 Maternal, Infant and Early Childhood Home Visiting Grant $727,037
66.432 State Public Water System Supervision $608,799
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $371,524
93.070 Environmental Public Health and Emergency Response $354,863
93.092 Affordable Care Act (aca) Personal Responsibility Education Program $349,580
93.944 Human Immunodeficiency Virus (hiv)/acquired Immunodeficiency Virus Syndrome (aids) Surveillance $257,928
93.251 Early Hearing Detection and Intervention $253,036
93.048 Special Programs for the Aging_title Iv_and Title Ii_discretionary Projects $234,825
93.236 Grants to States to Support Oral Health Workforce Activities $227,330
93.817 Hospital Preparedness Program (hpp) Ebola Preparedness and Response Activities $216,975
93.314 Early Hearing Detection and Intervention Information System (ehdi-Is) Surveillance Program $170,942
93.946 Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative Programs $160,918
20.607 Alcohol Open Container Requirements $154,751
93.336 Behavioral Risk Factor Surveillance System $153,793
93.130 Cooperative Agreements to States/territories for the Coordination and Development of Primary Care Offices $138,398
93.940 Hiv Prevention Activities_health Department Based $97,967
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $84,067
93.270 Adult Viral Hepatitis Prevention and Control $65,865
14.241 Housing Opportunities for Persons with Aids $58,672
93.073 Birth Defects and Developmental Disabilities - Prevention and Surveillance $31,870
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $22,259
93.197 Childhood Lead Poisoning Prevention Projects_state and Local Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children $18,302
93.745 Pphf: Health Care Surveillance/health Statistics Ð Surveillance Program Announcement: Behavioral Risk Factor Surveillance System Financed in Part by Prevention and Public Health Fund $15,511
93.421 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $9,250
93.387 National and State Tobacco Control Program (b) $6,982
93.074 Hospital Preparedness Program (hpp) and Public Health Emergency Preparedness (phep) Aligned Cooperative Agreements $3,492
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $-11,111