Audit 383720

Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Equipment and Real Property Management). Program. Childcare Access Means Parents in School (CCAMPIS); U.S. Department of Education; Assistance Listing Number 84.335A; Award Number P335A230060. Criteria. Per 2 CFR §200.313 (Uniform Guidance), non-federal entities must maintain property records that include a description, serial number, source of funding, title, acquisition date, cost, location, use, condition, and disposition data for property and equipment purchased with federal funds. Entities must also conduct regular inventories and reconcile them with property records. Condition. The College does not have a formal process or system in place to track fixed assets acquired with federal award funds. As a result, there is no centralized or consistent documentation of asset details, location, or usage for assets purchased with federal funds. Cause. The absence of a fixed asset tracking process appears to be due to a lack of awareness of federal requirements and insufficient internal controls over asset management related to federal awards. Effect. Without proper tracking, the College is at risk of noncompliance with federal regulations, potential loss or misuse of federally funded assets, and challenges in conducting accurate inventories or audits. This could lead to questioned costs or disallowed expenditures during federal reviews. Questioned Costs. No costs were questioned related to this finding. Recommendation. The College should implement a formal fixed asset tracking system that complies with 2 CFR §200.313. This system should include procedures for recording asset details, conducting periodic inventories, and reconciling records. Staff responsible for asset management should be trained on federal requirements to ensure ongoing compliance. View of Responsible Officials. Management agrees with finding and has prepared a corrective action plan.

Finding Type. Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Program. Coronavirus State and Local Fiscal Recovery Funds; U.S. Department of Treasury; Passed through MiLEAP; ADN - BSN Completion Grant Program; Assistance Listing Number 21.027; Award Number SLFRP0127. Criteria. Per 2 C.F.R. §200.318–§200.320 (Uniform Guidance) and the College’s established procurement policies, noncompetitive (sole-source) procurements must be appropriately justified and documented. Required documentation includes the rationale for using a sole-source method and evidence that the procurement meets allowable circumstances under federal regulations and internal policy. Condition. During our review of procurement transactions, we identified one instance of sole-source procurement for which the College did not properly document a procurement decision in accordance with 2 CFR 200.320 related to justifying the use of a noncompetitive procurement method. Specifically, the procurement files lacked written justification demonstrating why competition was not feasible and did not include evidence of required approvals in accordance with the College’s procurement policies even though the arrangement was allowable under the circumstances. Cause. The lack of documentation resulted from inconsistent adherence to procurement documentation requirements for sole-source arrangements. Personnel responsible for initiating and approving procurements did not consistently complete or retain the required justification forms or supporting documentation when noncompetitive methods were utilized. Effect. As a result of this condition, the College could not document a procurement decision for one vendor in accordance with federal regulations. Questioned Costs. No costs were questioned related to this finding. Recommendation. We recommend the College strengthen controls over sole-source procurements by requiring documented justification and formal approval prior to executing noncompetitive procurement arrangements. Management should also provide additional training to procurement and program staff to ensure consistent compliance with federal procurement requirements and internal policies. View of Responsible Officials. Management agrees with finding and has prepared a corrective action plan.

Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Procurement, Suspension and Debarment). Federal Programs. U.S Department of Education - Childcare Access Means Parents in School (CCAMPIS) (ALN 84.335A); Direct Award. U.S Department of Treasury - Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027); Passed through MiLEAP; ADN - BSN Completion Grant Program; Award Number SLFRP0127. Criteria. Under the requirements of 2 CFR Part 180 covered transactions for procurement and nonprocurement contracts that are expected to equal or exceed $25,000, the grantee must verify that the party being awarded a procurement and nonprocurement contract is not suspended, debarred, or otherwise excluded by checking the list of excluded parties, obtaining certification from the vendor or subrecipient, or including a clause or condition to the covered transaction with that entity. Condition. During our review of procurement transactions, we noted that the College did not verify or document that vendors were not suspended or debarred at the time of contract execution or payment. Specifically, the procurement files reviewed lacked evidence demonstrating that vendor eligibility was confirmed through SAM.gov or an equivalent verification process in accordance with federal requirements at the time the College entered into the covered transaction. Cause. The condition resulted from inadequate internal controls in place to ensure that the appropriate procedures are being followed for covered transactions in accordance with the requirements of the Uniform Guidance. Effect. The failure to monitor suspension and debarment could cause the College to enter into covered transactions with vendors who are not eligible to have goods or services purchased with federal monies. Upon review of the excluded parties listing subsequent to year end, it was determined that none of the parties that were awarded either procurement or nonprocurement contracts were excluded parties. Questioned Costs. No costs were questioned related to this finding. Recommendation. We recommend the College review its procedures for issuing contracts to ensure that the appropriate suspension and debarment evidence of verifications are retained for all vendors providing goods or services in excess of $25,000. The recommended best practice is to include a certification verifying suspension and debarment in every contract funded by federal dollars with every vendor to ensure compliance. View of Responsible Officials. Management agrees with finding and has prepared a corrective action plan.