Audit 364387

2022-003 Procurement and Suspension and Debarment Federal Organization U.S. Department of Health and Human Services Assistance Listing Number 93.493 Congressional Directives Condition The District did not maintain sufficient supporting records demonstrating that the appropriate steps were taken to meet the procurement and suspension and debarment compliance requirements. Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Entities receiving federal awards must have and use their documented procurement and suspension and debarment policies. Title 2 CFR 200.320 outlines the acceptable methods of procurement and suspension and debarment and establishes the maximum thresholds allowed. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require price or rate quotations to be obtained from an adequate number of qualified sources. Noncompetitive procurement can be used only in certain circumstances as allowed for in 2 CFR 200.320(c). Context This finding is a systemic problem. Cause The District’s internal controls over compliance did not include adequate controls over the retention of supporting documentation for the procurement and suspension and debarment process using federal funds. Effect We were unable to verify that federal procurement and suspension and debarmentcompliance requirements were followed. Questioned Costs None identified. Recommendation We recommend the District review, update, and follow its procurement and suspension and debarment policies in accordance with federal guidelines and maintain documentation showing evidence of the procedures completed for each expenditure using federal awards. Management’s Response Full and complete process of issuing request for proposal (RFP) and securing bids have been explained and trained for the Chief Financial Officer and Chief Executive Officer. The District will comply within the standard framework of all interested bid parties and will be provided with an RFP stating selection committee, selection criteria, and date and time of electronic bid submission. If a sole source is appropriate, then the CFO will prepare a sole source resolution for the Board of Commissioners to review and approve during an advanced notice held meeting open to the public. The sole source document will include at minimum one of the five designed sole source qualifications.

2022-003 Procurement and Suspension and Debarment Federal Organization U.S. Department of Health and Human Services Assistance Listing Number 93.493 Congressional Directives Condition The District did not maintain sufficient supporting records demonstrating that the appropriate steps were taken to meet the procurement and suspension and debarment compliance requirements. Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Entities receiving federal awards must have and use their documented procurement and suspension and debarment policies. Title 2 CFR 200.320 outlines the acceptable methods of procurement and suspension and debarment and establishes the maximum thresholds allowed. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require price or rate quotations to be obtained from an adequate number of qualified sources. Noncompetitive procurement can be used only in certain circumstances as allowed for in 2 CFR 200.320(c). Context This finding is a systemic problem. Cause The District’s internal controls over compliance did not include adequate controls over the retention of supporting documentation for the procurement and suspension and debarment process using federal funds. Effect We were unable to verify that federal procurement and suspension and debarmentcompliance requirements were followed. Questioned Costs None identified. Recommendation We recommend the District review, update, and follow its procurement and suspension and debarment policies in accordance with federal guidelines and maintain documentation showing evidence of the procedures completed for each expenditure using federal awards. Management’s Response Full and complete process of issuing request for proposal (RFP) and securing bids have been explained and trained for the Chief Financial Officer and Chief Executive Officer. The District will comply within the standard framework of all interested bid parties and will be provided with an RFP stating selection committee, selection criteria, and date and time of electronic bid submission. If a sole source is appropriate, then the CFO will prepare a sole source resolution for the Board of Commissioners to review and approve during an advanced notice held meeting open to the public. The sole source document will include at minimum one of the five designed sole source qualifications.