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Audit 313738

FY End
2022-06-30
Total Expended
$8.62M
Findings
8
Programs
16
Organization: Neptune Township Board of Education (NJ)
Year: 2022 Accepted: 2023-03-26
Auditor: Pkf O'Connor Davies LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
453393 2022-001 - - I
453394 2022-001 - - I
453395 2022-001 - - I
453396 2022-001 - - I
1029835 2022-001 - - I
1029836 2022-001 - - I
1029837 2022-001 - - I
1029838 2022-001 - - I

Programs

ALN Program Spent Major Findings
84.027 Special Education_grants to States $1.15M Yes 1
84.425 Covid-19 Education Stabilization Fund $999,779 Yes 0
10.553 School Breakfast Program $421,403 Yes 0
84.010 Title I Grants to Local Educational Agencies $416,285 - 0
93.778 Medical Assistance Program $282,654 - 0
84.027 Covid-19 Special Education_grants to States $189,686 Yes 1
10.555 National School Lunch Program $125,329 Yes 0
84.367 Improving Teacher Quality State Grants $117,509 - 0
21.027 Covid-19 Coronavirus State and Local Fiscal Recovery Funds $80,969 - 0
84.424 Student Support and Academic Enrichment Program $70,088 - 0
84.173 Special Education_preschool Grants $38,672 Yes 1
84.173 Covid-19 Special Education_preschool Grants $16,115 Yes 1
10.579 Covid-19 Child Nutrition Discretionary Grants Limited Availability $13,693 - 0
10.649 Covid-19 Pandemic Ebt Administrative Costs $6,198 - 0
10.559 Summer Food Service Program for Children $4,171 Yes 0
84.365 English Language Acquisition State Grants $2,615 - 0

Contacts

Name Title Type
C11TEDYJTE83 Peter Leonard Auditee
7327762200 Scott Clelland Auditor
No contacts on file

Notes to SEFA

Title: Relationship to Basic Financial Statements Accounting Policies: The accompanying schedules of expenditures of federal awards and state financial assistance include the federal award and state financial assistance activity under programs of federal and state government for the year ended June 30, 2022. The District is defined in Note 1 to the Districts basic financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies are included on the schedules of expenditures of federal awards and state financial assistance. The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the enterprise fund, which are presented using the accrual basis of accounting and those recorded in the special revenue fund, which are presented using the grant accounting budgetary basis ofaccounting. These bases of accounting are described in Note 1 to the District's basic financial statements. The information in these schedules are presented in accordance with the requirements of 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Therefore, some amounts presented in these schedules may differ from amounts presented, or used in the preparation of, the basic financial statements because the schedules present only selected portions of the operations of the District, it is not intended to and does not present the financial position, changes in net position or cash flows of the District. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Amounts reported in the accompanying schedules agree with amounts reported in the Districts basic financial statements. The basic financial statements present the general fund and special revenue fund on a GAAP basis. Budgetary comparison statements and schedules (RSI) are presented for the general fund and special revenue fund to demonstrate finance-related legal compliance in which certain revenue is permitted by law or grant agreement to be recognized in the fiscal year, whereas for GAAP reporting, revenue is not recognized until the subsequent year or when expenditures have been made. The general fund is presented in the accompanying schedules on the modified accrual basis of accounting with the exception of the revenue recognition of the two last state aid payments in the current year, which is mandated pursuant toN.J.S.A. 18A:22-44.2. For GAAP purposes those payments are not recognized until the subsequent year due to the state deferral and recording of the last state aid payments in the subsequent year. The special revenue fund is presented in the accompanying schedules on the grant accounting budgetary basis, which recognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basis does not. The special revenue fund also recognizes the last state aid payments in the current budget year, consistent with NJSA 18A:22-44.2. The net adjustment to reconcile from the budgetary basis to the GAAP basis is $439,623 for the general fund and $9,379 for the special revenue fund. See Note to Required Supplementary Information for a reconciliation of the budgetary basis to the modified accrual basis of accounting for the general and special revenue funds. Federal and State award revenues are reported in the Districts basic financial statements on a GAAP basis as follows: Federal State TotalGeneral Fund $282,654 $41,755,807 $42,038,461Special Revenue Fund 5,951,059 6,371,524 $12,322,583Food Service Enterprise Fund 2,310,314 39,713 $2,350,027Total award revenues $8,544,027 $48,167,044 $56,711,071
Title: Relationship to Federal and State Financial Reports Amounts reported in the Accounting Policies: The accompanying schedules of expenditures of federal awards and state financial assistance include the federal award and state financial assistance activity under programs of federal and state government for the year ended June 30, 2022. The District is defined in Note 1 to the Districts basic financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies are included on the schedules of expenditures of federal awards and state financial assistance. The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the enterprise fund, which are presented using the accrual basis of accounting and those recorded in the special revenue fund, which are presented using the grant accounting budgetary basis ofaccounting. These bases of accounting are described in Note 1 to the District's basic financial statements. The information in these schedules are presented in accordance with the requirements of 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Therefore, some amounts presented in these schedules may differ from amounts presented, or used in the preparation of, the basic financial statements because the schedules present only selected portions of the operations of the District, it is not intended to and does not present the financial position, changes in net position or cash flows of the District. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Amounts reported in the accompanying schedules agree with the amounts reported in the related federal and state financial reports.
Title: School-Wide Program Funds Accounting Policies: The accompanying schedules of expenditures of federal awards and state financial assistance include the federal award and state financial assistance activity under programs of federal and state government for the year ended June 30, 2022. The District is defined in Note 1 to the Districts basic financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies are included on the schedules of expenditures of federal awards and state financial assistance. The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the enterprise fund, which are presented using the accrual basis of accounting and those recorded in the special revenue fund, which are presented using the grant accounting budgetary basis ofaccounting. These bases of accounting are described in Note 1 to the District's basic financial statements. The information in these schedules are presented in accordance with the requirements of 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Therefore, some amounts presented in these schedules may differ from amounts presented, or used in the preparation of, the basic financial statements because the schedules present only selected portions of the operations of the District, it is not intended to and does not present the financial position, changes in net position or cash flows of the District. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. School-wide programs are not separate Federal programs as defined in the Uniform Guidance; amounts used in school-wide programs are included in the total expenditures of the program contributing the funds in the schedule of expenditures of Federal Awards. The following funds by program are included in school-wide programs in the District. IDEA Part B $957,139Title I 769,152Title IIA 104,061Total $1,848,663
Title: Other Accounting Policies: The accompanying schedules of expenditures of federal awards and state financial assistance include the federal award and state financial assistance activity under programs of federal and state government for the year ended June 30, 2022. The District is defined in Note 1 to the Districts basic financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies are included on the schedules of expenditures of federal awards and state financial assistance. The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the enterprise fund, which are presented using the accrual basis of accounting and those recorded in the special revenue fund, which are presented using the grant accounting budgetary basis ofaccounting. These bases of accounting are described in Note 1 to the District's basic financial statements. The information in these schedules are presented in accordance with the requirements of 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Therefore, some amounts presented in these schedules may differ from amounts presented, or used in the preparation of, the basic financial statements because the schedules present only selected portions of the operations of the District, it is not intended to and does not present the financial position, changes in net position or cash flows of the District. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Revenues and expenditures reported under the Food Donation Program represent current year value received and current year distributions, respectively. TPAF Social Security contributions represent the amount reimbursed by the State for the employers share of Social Security contributions for TPAF members for the year ended June 30, 2022. The post retirement pension, disability insurance and medical benefits received on-behalf of the District for the year ended June 30, 2022 amounted to $14,907,987. Since on-behalf post retirement pension, disability insurance and medical benefits are paid by the State directly, these expenditures are not subject to a single audit in accordance with New Jersey OMB Circular 15-08, however, they are required to be reported on the Schedule of Expenditures of State Financial Assistance, as directed by the funding agency.
Title: Indirect Costs Accounting Policies: The accompanying schedules of expenditures of federal awards and state financial assistance include the federal award and state financial assistance activity under programs of federal and state government for the year ended June 30, 2022. The District is defined in Note 1 to the Districts basic financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies are included on the schedules of expenditures of federal awards and state financial assistance. The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the enterprise fund, which are presented using the accrual basis of accounting and those recorded in the special revenue fund, which are presented using the grant accounting budgetary basis ofaccounting. These bases of accounting are described in Note 1 to the District's basic financial statements. The information in these schedules are presented in accordance with the requirements of 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Therefore, some amounts presented in these schedules may differ from amounts presented, or used in the preparation of, the basic financial statements because the schedules present only selected portions of the operations of the District, it is not intended to and does not present the financial position, changes in net position or cash flows of the District. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The District has elected not to use the 10% de minimis indirect cost rate as allowed by the Uniform Guidance.
Title: Adjustments Accounting Policies: The accompanying schedules of expenditures of federal awards and state financial assistance include the federal award and state financial assistance activity under programs of federal and state government for the year ended June 30, 2022. The District is defined in Note 1 to the Districts basic financial statements. All federal awards and state financial assistance received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies are included on the schedules of expenditures of federal awards and state financial assistance. The accompanying schedules of expenditures of federal awards and state financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the enterprise fund, which are presented using the accrual basis of accounting and those recorded in the special revenue fund, which are presented using the grant accounting budgetary basis ofaccounting. These bases of accounting are described in Note 1 to the District's basic financial statements. The information in these schedules are presented in accordance with the requirements of 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and New Jersey OMB Circular 15-08, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Therefore, some amounts presented in these schedules may differ from amounts presented, or used in the preparation of, the basic financial statements because the schedules present only selected portions of the operations of the District, it is not intended to and does not present the financial position, changes in net position or cash flows of the District. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The adjustments presented on schedule K-3 are the result of the cancellation of prior year encumbrances and accounts receivable.

Finding Details

Finding 2022-001
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
Finding 2022-001
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
Finding 2022-001
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
Finding 2022-001
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
Finding 2022-001
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
Finding 2022-001
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
Finding 2022-001
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
Finding 2022-001
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.