Full text
OFFICE OF
INSPECTOR GENERAL
DEPARTM ENT OF THE TREASURY
WASHINGTON, D.C. 20220
August 8, 2023
MEMORANDUM FOR JESSICA MILANO, ACTING CHIEF RECOVERY OFFICER,
DEPARTMENT OF THE TREASURY
FROM:
Deborah L. Harker /s/
Assistant Inspector General for Audit
SUBJECT:
Desk Review of the Commonwealth of Puerto Rico’s Use
of Coronavirus Relief Fund Proceeds
(OIG-CA-23-040)
Please find the attached desk review memorandum1 on the Commonwealth of
Puerto Rico’s (Puerto Rico) use of Coronavirus Relief Fund (CRF) proceeds. The
CRF is authorized under Title VI of the Social Security Act, as amended by Title V,
Division A of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Under a contract monitored by our office, Castro & Company, LLC (Castro), a
certified independent public accounting firm, performed the desk review. Castro
performed the desk review in accordance with the Council of the Inspectors
General on Integrity and Efficiency Quality Standards for Federal Offices of
Inspector General standards of independence, due professional care, and quality
assurance.
In its desk review, Castro personnel reviewed documentation for a non-statistical
selection of 201 transactions reported in the quarterly Financial Progress Reports
(FPR) and questioned costs of $33,681,692.45 (see attached schedule of monetary
benefits).
Castro determined that the expenditures related to Contracts greater than or equal
to $50,000, Grants greater than or equal to $50,000, Transfers greater than or
equal to $50,000,2 Aggregate Reporting less than $50,000,3 and Aggregate
1 The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) assigned the Department of
the Treasury Office of Inspector General with responsibility for compliance monitoring and
oversight of the receipt, disbursement, and use of Coronavirus Relief Fund (CRF) payments. The
purpose of the desk review is to perform monitoring procedures of the prime recipient’s receipt,
disbursement, and use of CRF proceeds as reported in the grants portal on a quarterly basis.
2 A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
3 Recipients are required to report CRF transactions greater than or equal to $50,000 in detail in the
grants portal. Transactions less than $50,000 can be reported as an aggregate lump-sum amount
by type (contracts, grants, loans, direct payments, and transfers to other government entities).
Page 2
Payments to Individuals4 did not comply with the CARES Act and Department of
the Treasury (Treasury) Guidance. Additionally, Castro determined that the risk of
unallowable use of funds is high. As such, Castro recommends that Treasury
Office of Inspector General personnel pursue obtaining missing documentation
from Puerto Rico’s management and follow up on necessary reporting corrections
within the grants portal. Based on Puerto Rico’s responsiveness to our requests
and management’s ability to provide documentation, Castro recommends we
determine if a full scope audit is feasible.
Castro noted that Puerto Rico management has not filed required Single Audit
reports for fiscal years 2019, 2020, and 2021. Additionally, we note that the report
for 2022 has not been filed. We will follow up with Puerto Rico management to
determine the status of the Single Audit reports.
Treasury OIG and Castro met with Puerto Rico management to discuss the
questioned costs. Puerto Rico management expressed that updates have been
made to the grants portal in subsequent cycle submissions, which they believe
have addressed all the findings contained in this report.
In connection with our contract with Castro, we reviewed Castro’s desk review
memorandum and related documentation and inquired of its representatives. Our
review, as differentiated from an audit performed in accordance with generally
accepted government auditing standards, was not intended to enable us to
express an opinion on Puerto Rico’s use of CRF proceeds. Castro is responsible
for the attached desk review memorandum and the conclusions expressed
therein. Our review found no instances in which Castro did not comply in all
material respects, with the Council of the Inspectors General on Integrity and
Efficiency’s Quality Standards for Federal Offices of Inspector General.
We appreciate the courtesies and cooperation provided to Castro and our staff
during the desk review. If you have any questions or require further information,
please contact me at (202) 486-1420, or a member of your staff may contact Lisa
DeAngelis, Deputy Assistant Inspector General for Audit, at (202) 487-8371.
cc:
Michelle. A. Dickerman, Deputy Assistant General Counsel, Department of
the Treasury
Victoria Collin, Chief Compliance & Finance Officer, Office of Recovery
Programs, Department of the Treasury
4 Expenditures for payments made to individuals, regardless of amount, are required to be
reported in the aggregate in the grants portal to prevent inappropriate disclosure of personally
identifiable information.
Page 3
Christopher Sun, Director of Data and Reporting, Office of Recovery
Programs, Department of the Treasury
Wayne Ference, Partner, Castro & Company, LLC
Francisco Parés Alicea, Secretary of Treasury, Commonwealth of Puerto
Rico Treasury Department
Page 4
Attachment
Schedule of Monetary Benefits
According to the Code of Federal Regulations,5 a questioned cost is a cost that is
questioned due to a finding:
(a) which resulted from a violation or possible violation of a statute,
regulation, or the terms and conditions of a Federal award, including for
funds used to match Federal funds;
(b) where the costs, at the time of the review, are not supported by
adequate documentation; or
(c) where the costs incurred appear unreasonable and do not reflect the
actions a prudent person would take in the circumstances.
Questioned costs are to be recorded in the Department of the Treasury’s
(Treasury) Joint Audit Management Enterprise System (JAMES).6 The amount will
also be included in the Office of Inspector General (OIG) Semiannual Report to
Congress. It is Treasury management's responsibility to report to Congress on the
status of the agreed to recommendations with monetary benefits in accordance
with 5 USC Section 405(b) of the Inspector General Act of 1978.
Recommendation
Questioned Costs
Recommendation No. 1
$33,681,692.45
The questioned cost represents amounts provided by Treasury under the
Coronavirus Relief Fund. As discussed in the attached desk review, $33,681,692.45
is Puerto Rico’s expenditures reported in the grant-reporting portal that lacked
supporting documentation.
5 2 CFR § 200.84 – Questioned Cost
6 JAMES is Treasury’s audit recommendation tracking system.
Desk Review of the Commonwealth of Puerto Rico
1
1635 King Street
Alexandria, VA 22314
Phone: 703.229.4440
Fax: 703.859.7603
www.castroco.com
August 8, 2023
OIG-CA-23-040
MEMORANDUM FOR DEBORAH L. HARKER,
ASSISTANT INSPECTOR GENERAL FOR AUDIT
FROM:
Wayne Ference
Partner, Castro & Company, LLC
SUBJECT:
Desk Review of the Commonwealth of Puerto Rico
On August 30, 2021, we initiated a desk review of the Commonwealth of Puerto
Rico’s (Puerto Rico) use of the Coronavirus Relief Fund (CRF) authorized under
Title VI of the Social Security Act, as amended by Title V, Division A of the
Coronavirus Aid, Relief, and Economic Security Act (CARES Act).1 The objective of
our desk review was to evaluate Puerto Rico’s documentation supporting its uses
of CRF proceeds as reported in the GrantSolutions2 portal and to assess the risk of
unallowable use of funds. The scope of our desk review was limited to obligation
and expenditure data for the period of March 1, 2020 through June 30, 2021 as
reported in Cycles 13 through 54 in the GrantSolutions portal.
As part of our desk review, we performed the following:
1) reviewed Puerto Rico’s quarterly Financial Progress Reports (FPRs)
submitted in the GrantSolutions portal through June 30, 2021;
2) reviewed the Department of the Treasury’s (Treasury) Coronavirus Relief
Fund Guidance as published in the Federal Register on January 15, 2021;5
1 P.L. 116-136 (March 27, 2020)
2 GrantSolutions, a grant and program management Federal shared service provider under the
U.S. Department of Health and Human Services, developed a customized and user-friendly
reporting solution to capture the use of CRF payments from recipients.
3 Calendar quarter ending June 30, 2020.
4 Calendar quarter ending June 30, 2021.
5 Coronavirus Relief Fund Guidance as published in the Federal Register (January 15, 2021)
https://home.treasury.gov/system/files/136/CRF-Guidance-Federal-Register_2021-00827.pdf
Desk Review of the Commonwealth of Puerto Rico
2
3) reviewed Treasury Office of Inspector General’s (OIG) Coronavirus Relief
Fund Frequently Asked Questions Related to Reporting and
Recordkeeping;6
4) reviewed Treasury OIG’s monitoring checklists7 of Puerto Rico’s quarterly
FPR submissions for reporting deficiencies;
5) reviewed other audit reports issued, such as Single Audit reports, and
those issued by the Government Accountability Office and other applicable
Federal agency OIGs for internal control or other deficiencies that may
pose risk or impact Puerto Rico’s uses of CRF proceeds;
6) reviewed Treasury OIG Office of Investigations (OI), the Council of the
Inspectors General on Integrity and Efficiency Pandemic Response
Accountability Committee (PRAC),8 and Treasury OIG Office of Counsel
input on issues that may pose risk or impact Puerto Rico’s uses of CRF
proceeds;
7) interviewed key personnel responsible for preparing and certifying Puerto
Rico’s GrantSolutions portal quarterly FPR submissions, as well as officials
responsible for obligating and expending CRF proceeds;
8) made a non-statistical selection of Contracts, Grants, Transfers,9 Aggregate
Reporting,10 and Aggregate Payments to Individuals11 data identified
through GrantSolutions reporting; and
9) evaluated documentation and records used to support Puerto Rico’s
quarterly FPRs.
6 Department of the Treasury Office of Inspector General Coronavirus Relief Fund Frequently Asked
Questions Related to Reporting and Recordkeeping OIG-20-028R; March 2, 2021.
7 The checklists are used by Treasury OIG personnel to monitor the progress of prime recipient
reporting in the GrantSolutions portal. GrantSolutions quarterly submission reviews are designed
to identify material omissions and significant errors, and where necessary, include procedures for
notifying prime recipients of misreported data for timely correction. Treasury OIG follows the CRF
Prime Recipient Quarterly GrantSolutions Submissions Monitoring and Review Procedures Guide,
OIG-CA-20-029R to monitor the prime recipients quarterly.
8 Section 15010 of P.L. 116-136 established the Pandemic Response Accountability Committee
within the Council of the Inspectors General on Integrity and Efficiency to promote transparency
and conduct and support oversight of covered funds (see Footnote 18 for a definition of covered
funds) and the coronavirus response to (1) prevent and detect fraud, waste, abuse, and
mismanagement; and (2) mitigate major risks that cut across program and agency boundaries.
9 A transfer to another government entity is a disbursement or payment to a government entity
that is legally distinct from the prime recipient.
10 Recipients are required to report CRF transactions greater than or equal to $50,000 in detail in
the GrantSolutions portal. Transactions less than $50,000 can be reported as an aggregate lump-
sum amount by type (contracts, grants, loans, direct payments, and transfers to other government
entities).
11 Obligations and expenditures for payments made to individuals, regardless of amount, are
required to be reported in the aggregate in the GrantSolutions portal to prevent inappropriate
disclosure of personally identifiable information.
Desk Review of the Commonwealth of Puerto Rico
3
Based on the results of our desk review, Puerto Rico’s use of CRF proceeds did not
comply with the CARES Act and Treasury’s Guidance, resulting in total questioned
costs of $33,681,692.45. Additionally, we determined that Puerto Rico’s risk of
unallowable use of funds is high. As such, Castro recommends Treasury OIG
pursue obtaining missing documentation from Puerto Rico’s management and
follows-up on necessary reporting corrections within the GrantSolutions portal.
Based on Puerto Rico’s responsiveness to Treasury OIG’s requests and
management’s ability to provide documentation, we recommend Treasury OIG
determine if a full scope audit is feasible.
Non-Statistical Transaction Selection Methodology
Treasury issued a CRF payment to Puerto Rico of $2,240,625,863.80. As of
Cycle 5,12 Puerto Rico’s cumulative obligations and expenditures were
$1,931,874,562.99 and $1,868,840,707.28, respectively. Puerto Rico’s cumulative
obligations and expenditures by payment type, as reported in GrantSolutions
through Cycle 5,12 are summarized below.
Payment Type
Cumulative
Obligations
Cumulative
Expenditures
Contracts >= $50,000
$ 306,417,383.89 $ 306,417,383.89
Grants >= $50,000
$ 503,450,430.07 $ 503,450,430.07
Transfers >= $50,000
$ 294,600,456.25 $ 294,600,456.25
Loans >= $50,000
$ -
$ -
Direct Payments >= $50,000
$ - $ -
Aggregate Reporting < $50,000
$ 751,919,338.16 $ 751,919,338.16
Aggregate Payments to Individuals (any
amount)
$ 75,486,954.62 $ 75,486,954.62
Totals
$ 1,931,874,562.99 $ 1,868,840,707.28
12 Calendar quarter ending June 30, 2021.
Desk Review of the Commonwealth of Puerto Rico
4
Castro made a non-statistical selection of Contracts greater than or equal to
$50,000, Grants greater than or equal to $50,000, Transfers greater than or equal
to $50,000, Aggregate Reporting less than $50,000, and Aggregate Payments to
Individuals. Selections were made using auditor judgment based on information
and risks identified in reviewing audit reports, the GrantSolutions portal reporting
anomalies13 identified by the Treasury OIG CRF monitoring team, and review of
Puerto Rico’s FPR submissions. Castro noted Puerto Rico did not obligate or
expend CRF proceeds to Loans greater than or equal to $50,000, or Direct
Payments greater than or equal to $50,000; therefore, we did not make a selection
of transactions from these categories.
The number of transactions (54) we selected to test was based on Puerto Rico’s
total CRF award amount and our overall risk assessment of Puerto Rico. To
allocate the number of transactions (54) by payment type (Contracts greater than
or equal to $50,000, Grants greater than or equal to $50,000, Transfers greater
than or equal to $50,000, Aggregate Reporting less than $50,000, and Aggregate
Payments to Individuals), we compared the payment type dollar amounts as a
percentage of cumulative obligations for Cycle 5.14 Additionally,
Treasury OIG identified 147 anomaly transactions, for a total of 201 transactions
tested. The 147 anomalies15 were outliers from the following payment types:
Contracts greater than or equal to $50,000, Grants greater than or equal to $50,000
and Transfers greater than or equal to $50,000, as well as potential duplicate
payments from payment type Contracts greater than or equal to $50,000.
Background
The CARES Act appropriated $150 billion to establish the CRF. Under the CRF,
Treasury made payments for specified uses to States and certain local
governments; the District of Columbia and U.S. Territories, including Puerto Rico,
the United States Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands; and Tribal governments.
Treasury issued a CRF payment to Puerto Rico for $2,240,625,863.80. The CARES
Act stipulates that a recipient may only use the funds to cover costs that—
13 Treasury OIG has a pre-defined list of risk indicators that are triggered based on data submitted
by recipients in the FPR submissions that meet certain criteria. Castro reviewed these results
provided by Treasury OIG for Puerto Rico.
14 Calendar quarter ending June 30, 2021.
15 These anomalies included potential duplicate payments and other anomalies that were identified
by the Treasury OIG CRF monitoring team as outliers. These outliers were flagged because the
transactions were identified as having high dollar amounts relative to transactions at similar points
in time, with similar award descriptions, and that were disbursed by the same prime recipient.
Desk Review of the Commonwealth of Puerto Rico
5
(1) are necessary expenditures incurred due to the public health emergency with
respect to the coronavirus disease 2019 (COVID-19);
(2) were not accounted for in the budget most recently approved as of March 27,
2020; and
(3) were incurred between March 1, 2020 and December 31, 2021.16
Section 15011 of the CARES Act requires each covered recipient17 to submit to
Treasury and the PRAC, no later than 10 days after the end of each calendar
quarter, a report that contains (1) the total amount of large covered funds18,19
received from Treasury; (2) the amount of large covered funds received that were
expended or obligated for each project or activity; (3) a detailed list of all projects
or activities for which large covered funds were expended or obligated; and
(4) detailed information on any level of sub-contracts or sub-grants awarded by
the covered recipient or its sub-recipients.
The CARES Act assigned Treasury OIG the responsibility for compliance
monitoring and oversight of the receipt, disbursement, and use of CRF proceeds.
Treasury OIG also has authority to recoup funds in the event that it is determined
a recipient failed to comply with requirements of subsection 601(d) of the Social
Security Act, as amended, (42 U.S.C. 801(d)).
Desk Review Results
Financial Progress Reports
Our review of Puerto Rico’s quarterly FPR submissions through June 30, 2021 did
not identify reporting issues.
16 P.L. 116-260 (December 27, 2020). The period of performance end date of the CRF was extended
through December 31, 2021 by the Consolidated Appropriations Act, 2021. The period of
performance end date for tribal entities was further extended to December 31, 2022 by the State,
Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act,
Division LL of the Consolidated Appropriations Act, 2023, P.L. 117-328, December 29, 2022, 136
Stat. 4459.
17 Section 15011 of P.L. 116-136 defines a covered recipient as any entity that receives large
covered funds and includes any State, the District of Columbia, and any territory or possession of
the United States.
18 Section 15010 of P.L. 116-136 defines covered funds as any funds, including loans, that are made
available in any form to any non-Federal entity, not including an individual, under Public Laws 116-
123, 127, and 136, as well as any other law which primarily makes appropriations for Coronavirus
response and related activities.
19 Section 15011 of P.L. 116-136 defines large covered funds as covered funds that amount to more
than $150,000.
Desk Review of the Commonwealth of Puerto Rico
6
Review of Single Audit Reports
As a result of our review of prior year audit reports, Castro confirmed with Puerto
Rico personnel that the Fiscal Year (FY) 2019, 2020, and 2021 Single Audit reports
were still in process and not available during our planning procedures. Castro
recommends that Treasury OIG follow-up to obtain the status of these Single
Audits.
Summary of Testing Results
Transactions selected for detailed review were not supported by documentation
and we were unable to determine if expenditures were allowable in accordance
with the CARES Act and Treasury’s Guidance. We were unable to determine if the
tested Contracts greater than or equal to $50,000, Grants greater than or equal to
$50,000, Transfers greater than or equal to $50,000, Aggregate Reporting less than
$50,000 and Aggregate Payments to Individuals were necessary expenditures due
to the COVID-19 public health emergency, were not accounted for in the budget
most recently approved as of March 27, 2020, and were incurred during the
covered period. The transactions selected for testing were not selected
statistically, and therefore results cannot be extrapolated to the total universe of
transactions.
The following table includes the total cumulative expenditure population amount
and the expenditure amount tested. Within the table below, we have included a
summary of unsupported and ineligible expenditures identified as questioned
costs. Additionally, in the far-right column, we have identified the expenditures
that Castro tested without exceptions noted. See the Desk Review Results section
below this table for a detailed discussion of questioned costs and other issues
identified throughout the course of our desk review.
Desk Review of the Commonwealth of Puerto Rico
7
Summary of Expenditure Testing and Recommended Results – As of Cycle 520
Payment Type21
Cumulative
Expenditure
Population
Amount
Cumulative
Expenditure
Tested Amount
Unsupported
Exception22
Ineligible
Exception
Castro Reviewed
Value Without
Exception
(per Support)
Contracts >=
$50,000
$ 243,383,528.18
$ 83,074,616.05
$ 1,587,873.15
$ -
$ 81,486,742.90
Grants >= $50,000
$ 503,450,430.07 $ 133,335,200.13
$ 20,670,220.00
$ -
$ 112,664,980.13
Loans >= $50,000
$ -
$ -
$ -
$ -
$ -
Transfers >=
$50,000
$ 294,600,456.25 $ 44,387,147.33
$ 7,602,356.30
$ -
$ 36,784,791.03
Direct Payments
>= $50,000
$ -
$ -
$ -
$ -
$ -
Aggregate
Reporting <
$50,000
$ 751,919,338.16 $ 325,991,052.68 $ 1,338,582.00 $ -
$ 324,652,470.68
Aggregate
Payments to
Individuals (in any
amount)
$ 75,486,954.62 $ 22,440,005.31 $ 2,482,661.00
$ -
$ 19,957,344.31
Totals
$ 1,868,840,707.28
$ 609,228,021.50
$ 33,681,692.45
$ -
$ 575,546,329.05
Contracts Greater Than or Equal to $50,000
Puerto Rico’s Contracts greater than or equal to $50,000 did not comply with the
CARES Act and Treasury’s Guidance. Of the 148 transactions tested, we identified
exceptions in three transactions resulting in questioned costs of $1,587,873.15. For
the three transactions consisting of expenses for medical supplies, COVID-19
related communication, and professional consulting services, Puerto Rico did not
provide documentation to support expenditures reported.
Castro followed-up with Puerto Rico management regarding the exceptions noted,
and they stated the contracts and supporting documentation referenced in
Castro’s follow-up request were maintained by various agencies of Puerto Rico.
These agencies were required to maintain documentation for all expenditures, but
those documents were only collected into a centralized location on a rolling basis
and upon request. Puerto Rico management told us that the agencies submitted
20 Calendar quarter ending June 30, 2021.
21 For CRF Desk Review reporting purposes, we consider the anomalies tested to be part of the
Contracts >= $50,000, Grants >= $50,000, and Transfers >= $50,000 obligation and payment types.
22 In addition to the questioned costs identified in the table above, Castro noted the following
misclassified expenditure balance, which should not have been included within the following
GrantSolutions payment type: $329,457,782.00 for Aggregate Reporting less than $50,000.
Although we do not consider misclassifications to be questioned costs, these misclassified
transaction balances do not comply with Treasury’s Guidance, as they should have been reported
under a different payment type. See Desk Review Results section for additional discussion.
Desk Review of the Commonwealth of Puerto Rico
8
periodic use of funds reports that were used to report quarterly expenditures to
Treasury, but those reports did not include the supporting documents requested
in this desk review. Puerto Rico management stated that despite its best efforts, it
could not collect all requested expenditure documents from the various agencies
within the timeframe of our desk review.
Grants Greater Than or Equal to $50,000
Puerto Rico’s Grants greater than or equal to $50,000 did not comply with the
CARES Act and Treasury’s Guidance. Of the 19 transactions tested, we identified
exceptions in four transactions resulting in questioned costs of $20,670,220.00.
Puerto Rico’s management did not provide sufficient documentation to support
the expenditure amounts related to the private hospital assistance grant program
that covered medical and payroll expenses. Puerto Rico’s management stated that
despite its best efforts, it could not collect the requested expenditure documents
within the timeframe of the desk review.
Transfers Greater Than or Equal to $50,000
Puerto Rico’s Transfers greater than or equal to $50,000 did not comply with the
CARES Act and Treasury’s Guidance. Of the 10 transactions tested, we identified
exceptions in two transactions resulting in questioned costs of $7,602,356.30.
Puerto Rico’s management did not maintain and make available to Castro upon
request, all documents and financial records sufficient to support expenditure
amounts related to assistance for local municipalities to cover expenses for loss of
income caused by COVID-19, housing support programs, support services for the
homeless, and public health and safety payroll expenses. Puerto Rico’s
management stated that despite its best efforts, it could not collect requested
expenditure documents within the timeframe of the desk review.
Aggregate Reporting Less than $50,000
Puerto Rico’s Aggregate Reporting less than $50,000 did not comply with the
CARES Act or Treasury’s Guidance. Of the 19 transactions tested, we identified
exceptions in 13 transactions resulting in questioned costs of $1,338,582.00.
Puerto Rico management told us that these were payments made to individuals
that need to be corrected in a subsequent cycle submission. Puerto Rico’s
management did not provide documentation necessary to support expended
amounts reported in the GrantSolutions FPRs. The support provided by Puerto
Rico management consisted of a spreadsheet with the Recipient Name, CRF
Program Name, Transaction ID, Expense Amount, and Payment Date, without
proof that the support could be tied to the system of records.
Desk Review of the Commonwealth of Puerto Rico
9
Upon further inquiry, Puerto Rico’s management stated that at the time of the
Cycle 523 submission, these expenditures were consolidated into the reported total
for Aggregate Reporting less than $50,000. Management performed a subsequent
reconciliation and found that these expenditures should not have been reported
as Aggregate Reporting less than $50,000, but instead should have been reported
as either Aggregate Payments to Individuals or not reported at all. Management
stated that they were still finalizing their reconciliation efforts and plans to make
corrections within a subsequent cycle submission.
Although the Commonwealth of Puerto Rico management stated these 13
transactions mentioned above were reported incorrectly in Aggregate Reporting
less than $50,000, additional documentation to support the expenditure amount
was not provided. Therefore, questioned costs of $1,338,582.00 were considered
unsupported.
We performed further analysis on the Aggregate Reporting less than $50,000
population and noted that there were a significant number of individual
transactions that were for amounts greater than $50,000. In total, we noted 29
transactions totaling $329,457,782.00 out of $751,919,338.00 (44%) that appeared
to be individual transactions with amounts greater than $50,000. We obtained the
Cycle 1124 FPR from GrantSolutions and noted a decrease of $3,395,500.00 when
comparing the total Aggregate Reporting less than $50,000 from Cycle 525 to
Cycle 11.26 Although we do not consider these misclassified expenditures as
questioned costs, we recommend that Treasury OIG follow-up to see if reporting
corrections are necessary.
Aggregate Payments to Individuals
Puerto Rico’s Aggregate Payments to Individuals did not comply with the CARES
Act and Treasury’s Guidance. Of the five transactions tested, we identified
exceptions in two transactions resulting in questioned costs of $2,482,661.00.
Puerto Rico’s management did not provide sufficient documentation to support
two non-payroll transactions related to the Economic Benefit - Student
Technology Program.
23 Calendar quarter ending June 30, 2021.
24 Calendar quarter ending December 31, 2022.
25 Calendar quarter ending June 30, 2021.
26 Calendar quarter ending December 31, 2022.
Desk Review of the Commonwealth of Puerto Rico
10
Conclusion
Castro confirmed with Puerto Rico personnel that the Fiscal Year (FY) 2019, 2020,
and 2021 Single Audit reports were still in process and not available during our
planning procedures. Castro recommends that Treasury OIG follow-up to obtain
the status of these Single Audits.
Additionally, we determined that certain expenditures related to Contracts greater
than or equal to $50,000, Grants greater than or equal to $50,000, Transfers
greater than or equal to $50,000, Aggregate Reporting less than $50,000, and
Aggregate Payments to Individuals did not comply with the CARES Act and
Treasury’s Guidance. Our desk review resulted in total questioned costs of
$33,681,692.45. Additionally, we determined that Puerto Rico’s risk of unallowable
use of funds is high.
As such, Castro recommends Treasury OIG pursue obtaining missing
documentation from Puerto Rico’s management and follows-up on necessary
reporting corrections within the GrantSolutions portal. Based on Puerto Rico’s
responsiveness to Treasury OIG’s requests and management’s ability to provide
documentation, we recommend Treasury OIG determine if a full scope audit is
feasible.
*****
All work completed with this letter complies with the Council of the Inspectors
General on Integrity and Efficiency’s Quality Standards for Federal Offices of
Inspectors General, which require that the work adheres to the professional
standards of independence, due professional care, and quality assurance to
ensure the accuracy of the information presented.27 We appreciate the courtesies
and cooperation provided to our staff during the desk review.
Sincerely,
Wayne Ference
Partner, Castro & Company, LLC
27 https://www.ignet.gov/sites/default/files/files/Silver%20Book%20Revision%20-%208-20-12r.pdf