Audit 359270

2024-001 Procurement Federal Agency: U.S. and Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Assistance Listing Number: 21.027 Award Period: October 1, 2023 to September 30, 2024 • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria: Uniform Grant Guidance requires UG §200.318 General procurement standards requires the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: During our testing, we noted that CSC did not maintain support for procurement transactions exceeding the threshold. These transactions were not competitively bid, and the rationale for vendor selection was not documented. Questioned Costs: None Context: For four out of five procurement transactions tested, we noted that documentation related does not have evidence showing that proper competitive bidding was performed. Cause: The policies and procedures surrounding the procurement transaction tested was not consistently followed as designed. Effect: We noted no instance of noncompliance with the provisions of procurement; however, the lack of effective internal controls over this compliance requirement provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend that CSC ensure consistent application of its policies and procedures to minimize the risk of intentional and unintentional misstatements in the normal course of business. Views of Responsible Officials of the Auditee: Explanation of disagreement with audit finding. CSC disagrees with the classification of 2004-001 as a significant finding rather than receiving management recommendations on improving our procedures from the auditors because there was only one item where CSC could not retrieve the proof that at least three bids were sought prior to the signing of the contract. CSC does not consider the three other items that the auditors flagged as clear procurements because two of the items were disbursements of funds on behalf of clients for vocational education that those clients had already signed up for and were preapproved by the funder in question. CSC had no option but to disburse funds for those educational activities. The rational for the disbursements can be found in the grant agreement. Similarly in the case of the third item, CSC had to disburse funds based on the criteria provided by the grantor and the grantor approved the transaction prior to its signing. These are grey areas that deserve no more than formal management recommendations. Regardless, based on the results of the audit, CSC has updated its procurement policy for grant-related purchases to align with federal requirements by increasing the spending threshold that requires obtaining bids from at least three vendors or service providers from $5,000 to $10,000. Action Taken in Response to Finding: CSC’s updated procurement policy states in part that price or rate quotations must be obtained from an adequate number of qualified sources for the procurement of services, supplies, or other property that cost more than $10,000 but no more than $250,000. Generally, a minimum of three bids should be obtained and documented. Procurements over $250,000 require the use of Competitive Proposals.

2024-001 Procurement Federal Agency: U.S. and Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Assistance Listing Number: 21.027 Award Period: October 1, 2023 to September 30, 2024 • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria: Uniform Grant Guidance requires UG §200.318 General procurement standards requires the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: During our testing, we noted that CSC did not maintain support for procurement transactions exceeding the threshold. These transactions were not competitively bid, and the rationale for vendor selection was not documented. Questioned Costs: None Context: For four out of five procurement transactions tested, we noted that documentation related does not have evidence showing that proper competitive bidding was performed. Cause: The policies and procedures surrounding the procurement transaction tested was not consistently followed as designed. Effect: We noted no instance of noncompliance with the provisions of procurement; however, the lack of effective internal controls over this compliance requirement provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend that CSC ensure consistent application of its policies and procedures to minimize the risk of intentional and unintentional misstatements in the normal course of business. Views of Responsible Officials of the Auditee: Explanation of disagreement with audit finding. CSC disagrees with the classification of 2004-001 as a significant finding rather than receiving management recommendations on improving our procedures from the auditors because there was only one item where CSC could not retrieve the proof that at least three bids were sought prior to the signing of the contract. CSC does not consider the three other items that the auditors flagged as clear procurements because two of the items were disbursements of funds on behalf of clients for vocational education that those clients had already signed up for and were preapproved by the funder in question. CSC had no option but to disburse funds for those educational activities. The rational for the disbursements can be found in the grant agreement. Similarly in the case of the third item, CSC had to disburse funds based on the criteria provided by the grantor and the grantor approved the transaction prior to its signing. These are grey areas that deserve no more than formal management recommendations. Regardless, based on the results of the audit, CSC has updated its procurement policy for grant-related purchases to align with federal requirements by increasing the spending threshold that requires obtaining bids from at least three vendors or service providers from $5,000 to $10,000. Action Taken in Response to Finding: CSC’s updated procurement policy states in part that price or rate quotations must be obtained from an adequate number of qualified sources for the procurement of services, supplies, or other property that cost more than $10,000 but no more than $250,000. Generally, a minimum of three bids should be obtained and documented. Procurements over $250,000 require the use of Competitive Proposals.

2024-002 Suspension and Debarment Federal Agency: U.S. and Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Assistance Listing Number: 21.027 Award Period: October 1, 2023 to September 30, 2024 • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of suspension and debarment. 2 CFR Part 180.220, states that recipients of federal funds are prohibited from contracting with or making sub awards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by: (1) Checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM; (2) Collecting a certification from the entity, or (3) Adding a clause or condition to the covered transaction with that entity. CSC should have internal controls designed and effectively operating to ensure compliance with those provisions. Condition: During our testing, we noted CSC did not maintain support to show its review of the search for suspension and debarment was done before contracts were entered into. CSC did not have effective controls to ensure vendors were not suspended or debarred. Questioned Costs: None Context: For four out of four vendors tested, we noted that documentation related to suspension and debarment verification was not documented. However, our testing did not identify any vendors that had been suspended or debarred. Cause: The policies and procedures surrounding suspension and debarment verification were not consistently followed as designed. Effect: CLA noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of effective internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend CSC ensure consistent application of its policies and procedures so that an adequate verification process is in place to review potential contractors to determine they are not suspended or debarred before entering into the contract. Alternatively, a clause can be added to CSC’s standard procurement contracts requiring CSC’s potential vendors to attest to whether they have been suspended or debarred. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding. CSC’s has updated its policy as of April 2025 to state that a contract or subgrant must not be made to parties listed on the government-wide exclusions in the System for Award Management (SAM). CSC must confirm that all new contractors, consultants, and subrecipients are not listed in SAM Exclusions.

2024-002 Suspension and Debarment Federal Agency: U.S. and Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Assistance Listing Number: 21.027 Award Period: October 1, 2023 to September 30, 2024 • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of suspension and debarment. 2 CFR Part 180.220, states that recipients of federal funds are prohibited from contracting with or making sub awards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by: (1) Checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM; (2) Collecting a certification from the entity, or (3) Adding a clause or condition to the covered transaction with that entity. CSC should have internal controls designed and effectively operating to ensure compliance with those provisions. Condition: During our testing, we noted CSC did not maintain support to show its review of the search for suspension and debarment was done before contracts were entered into. CSC did not have effective controls to ensure vendors were not suspended or debarred. Questioned Costs: None Context: For four out of four vendors tested, we noted that documentation related to suspension and debarment verification was not documented. However, our testing did not identify any vendors that had been suspended or debarred. Cause: The policies and procedures surrounding suspension and debarment verification were not consistently followed as designed. Effect: CLA noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of effective internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend CSC ensure consistent application of its policies and procedures so that an adequate verification process is in place to review potential contractors to determine they are not suspended or debarred before entering into the contract. Alternatively, a clause can be added to CSC’s standard procurement contracts requiring CSC’s potential vendors to attest to whether they have been suspended or debarred. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding. CSC’s has updated its policy as of April 2025 to state that a contract or subgrant must not be made to parties listed on the government-wide exclusions in the System for Award Management (SAM). CSC must confirm that all new contractors, consultants, and subrecipients are not listed in SAM Exclusions.

2024-001 Procurement Federal Agency: U.S. and Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Assistance Listing Number: 21.027 Award Period: October 1, 2023 to September 30, 2024 • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria: Uniform Grant Guidance requires UG §200.318 General procurement standards requires the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: During our testing, we noted that CSC did not maintain support for procurement transactions exceeding the threshold. These transactions were not competitively bid, and the rationale for vendor selection was not documented. Questioned Costs: None Context: For four out of five procurement transactions tested, we noted that documentation related does not have evidence showing that proper competitive bidding was performed. Cause: The policies and procedures surrounding the procurement transaction tested was not consistently followed as designed. Effect: We noted no instance of noncompliance with the provisions of procurement; however, the lack of effective internal controls over this compliance requirement provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend that CSC ensure consistent application of its policies and procedures to minimize the risk of intentional and unintentional misstatements in the normal course of business. Views of Responsible Officials of the Auditee: Explanation of disagreement with audit finding. CSC disagrees with the classification of 2004-001 as a significant finding rather than receiving management recommendations on improving our procedures from the auditors because there was only one item where CSC could not retrieve the proof that at least three bids were sought prior to the signing of the contract. CSC does not consider the three other items that the auditors flagged as clear procurements because two of the items were disbursements of funds on behalf of clients for vocational education that those clients had already signed up for and were preapproved by the funder in question. CSC had no option but to disburse funds for those educational activities. The rational for the disbursements can be found in the grant agreement. Similarly in the case of the third item, CSC had to disburse funds based on the criteria provided by the grantor and the grantor approved the transaction prior to its signing. These are grey areas that deserve no more than formal management recommendations. Regardless, based on the results of the audit, CSC has updated its procurement policy for grant-related purchases to align with federal requirements by increasing the spending threshold that requires obtaining bids from at least three vendors or service providers from $5,000 to $10,000. Action Taken in Response to Finding: CSC’s updated procurement policy states in part that price or rate quotations must be obtained from an adequate number of qualified sources for the procurement of services, supplies, or other property that cost more than $10,000 but no more than $250,000. Generally, a minimum of three bids should be obtained and documented. Procurements over $250,000 require the use of Competitive Proposals.

2024-001 Procurement Federal Agency: U.S. and Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Assistance Listing Number: 21.027 Award Period: October 1, 2023 to September 30, 2024 • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria: Uniform Grant Guidance requires UG §200.318 General procurement standards requires the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: During our testing, we noted that CSC did not maintain support for procurement transactions exceeding the threshold. These transactions were not competitively bid, and the rationale for vendor selection was not documented. Questioned Costs: None Context: For four out of five procurement transactions tested, we noted that documentation related does not have evidence showing that proper competitive bidding was performed. Cause: The policies and procedures surrounding the procurement transaction tested was not consistently followed as designed. Effect: We noted no instance of noncompliance with the provisions of procurement; however, the lack of effective internal controls over this compliance requirement provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend that CSC ensure consistent application of its policies and procedures to minimize the risk of intentional and unintentional misstatements in the normal course of business. Views of Responsible Officials of the Auditee: Explanation of disagreement with audit finding. CSC disagrees with the classification of 2004-001 as a significant finding rather than receiving management recommendations on improving our procedures from the auditors because there was only one item where CSC could not retrieve the proof that at least three bids were sought prior to the signing of the contract. CSC does not consider the three other items that the auditors flagged as clear procurements because two of the items were disbursements of funds on behalf of clients for vocational education that those clients had already signed up for and were preapproved by the funder in question. CSC had no option but to disburse funds for those educational activities. The rational for the disbursements can be found in the grant agreement. Similarly in the case of the third item, CSC had to disburse funds based on the criteria provided by the grantor and the grantor approved the transaction prior to its signing. These are grey areas that deserve no more than formal management recommendations. Regardless, based on the results of the audit, CSC has updated its procurement policy for grant-related purchases to align with federal requirements by increasing the spending threshold that requires obtaining bids from at least three vendors or service providers from $5,000 to $10,000. Action Taken in Response to Finding: CSC’s updated procurement policy states in part that price or rate quotations must be obtained from an adequate number of qualified sources for the procurement of services, supplies, or other property that cost more than $10,000 but no more than $250,000. Generally, a minimum of three bids should be obtained and documented. Procurements over $250,000 require the use of Competitive Proposals.

2024-002 Suspension and Debarment Federal Agency: U.S. and Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Assistance Listing Number: 21.027 Award Period: October 1, 2023 to September 30, 2024 • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of suspension and debarment. 2 CFR Part 180.220, states that recipients of federal funds are prohibited from contracting with or making sub awards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by: (1) Checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM; (2) Collecting a certification from the entity, or (3) Adding a clause or condition to the covered transaction with that entity. CSC should have internal controls designed and effectively operating to ensure compliance with those provisions. Condition: During our testing, we noted CSC did not maintain support to show its review of the search for suspension and debarment was done before contracts were entered into. CSC did not have effective controls to ensure vendors were not suspended or debarred. Questioned Costs: None Context: For four out of four vendors tested, we noted that documentation related to suspension and debarment verification was not documented. However, our testing did not identify any vendors that had been suspended or debarred. Cause: The policies and procedures surrounding suspension and debarment verification were not consistently followed as designed. Effect: CLA noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of effective internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend CSC ensure consistent application of its policies and procedures so that an adequate verification process is in place to review potential contractors to determine they are not suspended or debarred before entering into the contract. Alternatively, a clause can be added to CSC’s standard procurement contracts requiring CSC’s potential vendors to attest to whether they have been suspended or debarred. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding. CSC’s has updated its policy as of April 2025 to state that a contract or subgrant must not be made to parties listed on the government-wide exclusions in the System for Award Management (SAM). CSC must confirm that all new contractors, consultants, and subrecipients are not listed in SAM Exclusions.

2024-002 Suspension and Debarment Federal Agency: U.S. and Department of Treasury Federal Program Title: Coronavirus State and Local Fiscal Recovery Assistance Listing Number: 21.027 Award Period: October 1, 2023 to September 30, 2024 • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of suspension and debarment. 2 CFR Part 180.220, states that recipients of federal funds are prohibited from contracting with or making sub awards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria. When a nonfederal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by: (1) Checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM; (2) Collecting a certification from the entity, or (3) Adding a clause or condition to the covered transaction with that entity. CSC should have internal controls designed and effectively operating to ensure compliance with those provisions. Condition: During our testing, we noted CSC did not maintain support to show its review of the search for suspension and debarment was done before contracts were entered into. CSC did not have effective controls to ensure vendors were not suspended or debarred. Questioned Costs: None Context: For four out of four vendors tested, we noted that documentation related to suspension and debarment verification was not documented. However, our testing did not identify any vendors that had been suspended or debarred. Cause: The policies and procedures surrounding suspension and debarment verification were not consistently followed as designed. Effect: CLA noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of effective internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend CSC ensure consistent application of its policies and procedures so that an adequate verification process is in place to review potential contractors to determine they are not suspended or debarred before entering into the contract. Alternatively, a clause can be added to CSC’s standard procurement contracts requiring CSC’s potential vendors to attest to whether they have been suspended or debarred. Views of Responsible Officials of the Auditee: There is no disagreement with the audit finding. CSC’s has updated its policy as of April 2025 to state that a contract or subgrant must not be made to parties listed on the government-wide exclusions in the System for Award Management (SAM). CSC must confirm that all new contractors, consultants, and subrecipients are not listed in SAM Exclusions.