Capacity Audit of FEMA Grant Funds Awarded to the Puerto Rico Department of Housing

Williams Adley found that FEMA did not ensure that the Puerto Rico Department of Housing (PRDOH) established and implemented policies, procedures, and practices to account for and expend Public Assistance (PA) grant funds according to Federal regulations and FEMA guidance. Specifically, PRDOH did not have sufficient controls over its processes for claiming force account labor costs. This occurred because FEMA did not provide adequate oversight and ensure PRDOH correctly entered its employees’ timesheets into the payroll system, increasing the risk of fraud that might occur and not be detected. We made two recommendations to improve PRDOH’s management of FEMA PA funds, ensuring they are expended according to Federal regulations and FEMA guidance. FEMA concurred with the recommendations.