Of the $18.9 million of Child Care and Development Fund targeted fund expenditures that we reviewed, the Commonwealth of Puerto Rico, Department of the Family (State agency), complied with Federal requirements for the use of $6.4 million. However, the State agency did not comply with Federal requirements for the use of the remaining $12.5 million. Specifically, the State agency used $10.9 million for nontargeted fund activities and $1.6 million in targeted funds for contractor activities not specified as “targeted.”
In the case of the $10.9 million used for nontargeted fund activities, the error occurred because the State agency failed to use the funding allocation established by the Administration for Children and Families (ACF). Instead, the State agency used an allocation established with an internal budgeting methodology, resulting in targeted funds being used for nontargeted activities. In the case of the $1.6 million in contractor activities that were not specified as targeted, the error occurred because the State agency did not adequately monitor closing reports submitted by contractors and did not have procedures requiring that its accounting records be reconciled with these reports.
We recommended that the State agency (1) refund to the Federal Government $12.5 million for expenditures that were not used for targeted fund activities, (2) ensure that targeted funds are expended in accordance with funding allocations established by ACF, and (3) develop procedures for reconciling accounting records to reports submitted by contractors and monitor these reports to ensure that contractors are using targeted funds for targeted activities. The State agency did not indicate concurrence or nonconcurrence with our recommendations.
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