U.S. Department of the Treasury Finding: Procurement Policy & Procurement Action Documentation Reference Number: 2024-004 Program: 21.027 COVID-19 State and Local Fiscal Recovery Funds Program Identifying Number: SLFRP0139 Type of Finding: Significant Deficiency Compliance Requirement: Procurement and Suspension and Debarment Condition: The Land Bank did not retain supporting documentation for procurements entered during the year ended December 31, 2024. The Land Bank adopted a written procurement policy on September 11, 2024. The Land Bank entered contracts after the adoption of its new procurement policy during the period from September 11, 2024 through December 31, 2024 without performing the required procurement actions. A similar finding was reported in the 2023 audit. Context: The Land Bank represented that contractors were evaluated by analyzing City of Wilmington permit information prior to the implementation of the procurement policy in September 2024. The Land Bank did not retain documentation of this analysis to support its procurement actions. Criteria: CFR § 200.318, General Procurement Standards and § 200.320 Methods of Procurement to be Followed, of the Uniform Guidance apply to the State and Local Fiscal Recovery Funds Program and require the following: i. The Land Bank must adopt documented procurement procedures that are consistent with the applicable State, local, and federal regulations. ii. The Land Bank’s documented procurement procedures must include the following elements at a minimum: a. Micro-purposes - purchases up to $50,000 may be made without soliciting competitive price or rate quotations if the price is considered reasonable. b. Small Purchases - purchases between $50,000 and $250,000 may be made with soliciting competitive price or rate quotations from an adequate number of qualified sources. c. Formal Procedures - purchases over $250,000 must be made by sealed bid or competitive proposal. The Land Bank’s procurement policy requires the following: Method of Purchase: Selection of contracts for goods and services shall be made only on a competitive basis except as otherwise set forth herein. The following method of purchase shall be used when required by this Policy in order to achieve the highest quality and lowest cost: i. Micro-purposes ($0-$49,999) - Designated staff may procure goods and services on behalf of the Land Bank without obtaining three quotations and without approval of the Board. Vendor selection and pricing should be reviewed at least annually for convenience and cost savings. ii. Small Purchases ($50,000-$249,999) - At least three written quotations will be obtained whenever possible. The Land Bank shall solicit informal quotations utilizing sources most likely to identify the highest quality and lowest price of a particular good or service, including newspaper and magazine advertisements, internet searches, chamber of commerce recommendations, and prior experience of the Land Bank. The Land Bank shall create and maintain a written or digital record of the quotations solicited and received for such purchases. At its discretion, Land Bank staff may decide to utilize the RFP process in lieu of the quotation process for any contract even when it is not required. iii. Large Purchases ($250,000+)- A request for proposals (RFP) issued by the Land Bank shall be required. Any large purchase contract entered into by the Land Bank shall require the approval of the Board. Cause: The Land Bank did not adopt a written procurement policy until September 2024. The Land Bank did not retain evidence to support its assertion that procurement actions were performed during the year ended December 31, 2024. Questioned Costs: None Effect: The Land Bank did not comply with the Uniform Guidance requirement to adopt a procurement policy until September 2024 and did not fully document its procurement actions. Recommendation: We recommend Land Bank adhere to the adopted procurement policy and prepare and retain documentation for each procurement action.
U.S. Department of the Treasury Finding: Salary Certifications and Allocations Reference Number: 2024-005 Program: 21.027 COVID-19 State and Local Fiscal Recovery Funds Program Identifying Number: SLFRP0139 Type of Finding: Significant Deficiency Compliance Requirement: Allowable Costs Condition: We found that during 2024 the Land Bank charged payroll expense to the SLFRF Program for the period of October 11, 2022 through December 31, 2024. The Land Bank obtained certifications from each employee to document percentage of time dedicated to the SLFRF Program during the audit in September 2025. Documentation required by the Uniform Guidance to support payroll charges to the SLFRF program was not prepared contemporaneously. Criteria: CFR § 200.430,Compensation - Personal Services, applies to the State and Local Fiscal Recovery Funds Program and requires the following: Standards for Documentation of Personnel Expenses. i. Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: a. Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; b. Be incorporated into the official records of the recipient or subrecipient; c. Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); d. Encompass federally-assisted, and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; e. Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and f. Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Cause: The Land Bank did not prepare documentation (contemporaneous time sheets or time certifications) to support the allocation of payroll costs. The Land Bank did not analyze charges to other grants to determine if payroll costs were previously billed to a grant. Questioned Costs: None Effect: As a result, the Land Bank did not comply with the federal requirements for allowable costs under 2 CFR § 200.430. Recommendation: We recommend the Land Bank implement controls and policies to ensure payroll is properly documented and allocated to grant programs.