Audit 395838

2025-001 – Noncompliance with Competitive Bidding Requirements – Significant Deficiency Federal Assistance Listing Number (“FALN”): 10.558 Name of Program or Cluster: Child and Adult Care Food Program Federal Agencies: Department of Agriculture Pass-through Entities: New York State Department of Health (10.558) Compliance Requirement: Procurement and Suspension and Debarment Condition The organization did not obtain the required number of written bids in accordance with its procurement policy. Fewer bids than required were obtained or documentation supporting the solicitation and receipt of bids was not maintained. Additionally, multiple purchases were made from the same vendor for similar goods or services during the fiscal year, and the aggregate amount exceeded thresholds requiring competitive bids; however, documentation did not demonstrate that these purchases were evaluated collectively for procurement purpose. Criteria The Settlement’s procurement policy requires three written bids for purchases between $5,000 and $25,000 and five written bids for purchases exceeding $25,000 but not exceeding $100,000. A public solicitation of a minimum of five bids must be conducted for purchases that exceed $100,000 Additionally, Uniform Grant Guidance (“UGG”) (2 CFR 200.318–200.320) requires procurements to be conducted in a manner providing full and open competition and requires entities to maintain records sufficient to detail the procurement history, including the basis for vendor selection. UGG also prohibits splitting procurements to avoid competition requirements. Cause Procurement procedures were not consistently followed due to inadequate review and oversight controls to ensure compliance with established bidding requirements and documentation standards. Effect Failure to obtain the required number of bids may limit competition and increases the risk that purchases are not made at the most advantageous price. It may also result in noncompliance with internal procurement policies and UGG requirements, which could lead to questioned costs. Questioned Costs None Context No questioned costs were identified as the goods and services were received and costs appeared reasonable and allowable. Recommendation Management should strengthen procurement controls by ensuring that the required number of written bids are obtained and documented in accordance with procurement policy. Management should also implement procedures to monitor purchases from the same vendor to ensure related procurements are evaluated collectively and comply with competitive bidding requirements. Views of Responsible Officials See Corrective Action Plan in Appendix 1.

2025-002 – Noncompliance with Suspension and Debarment Requirements – Significant Deficiency Federal Assistance Listing Number (“FALN”): 10.558 Name of Program or Cluster: Child and Adult Care Food Program Federal Agencies: Department of Agriculture Pass-through Entities: New York State Department of Health (10.558) Compliance Requirement: Procurement and Suspension and Debarment Condition The organization did not consistently verify that vendors were not suspended or debarred from participating in Federal programs prior to entering into covered transactions. The procurement files did not contain documentation demonstrating that the organization verified vendor eligibility through the System for Award Management (“SAM”) or obtained other allowable forms of certification. Criteria Uniform Grant Guidance (“UGG”) (2 CFR 200.214) requires Non-Federal entities to ensure that contractors receiving Federal funds are not suspended or debarred from doing business with the Federal government. Cause The Settlement does not have adequate procedures in place to ensure that suspension and debarment verification is consistently performed and documented prior to awarding contracts or making payments funded by Federal awards. Effect Failure to verify vendor eligibility increases the risk that the organization could enter a transaction with a vendor that is suspended or debarred from participating in Federal programs, which may result in noncompliance with Federal regulations and potential questioned costs. Questioned Costs None Context No questioned costs were identified as no vendors tested were suspended or debarred. Recommendation Management should implement procedures to ensure that suspension and debarment verification is performed and documented for vendors prior to entering into covered transactions funded by Federal awards. Documentation may include evidence of a SAM search, vendor certification, or inclusion of a suspension and debarment clause in applicable contracts. Additionally, management should provide training to staff responsible for procurement to ensure compliance with Federal requirements. Views of Responsible Officials See Corrective Action Plan in Appendix 1

2025-003 – Noncompliance with Reporting Requirements – Significant Deficiency Federal Assistance Listing Number (“FALN”): 93.600 Name of Program or Cluster: Head Start Cluster Federal Agencies: Department of Health and Human Services (“HHS”) Compliance Requirement: Reporting Condition The Settlement did not submit required semi-annual SF-425 Federal Financial Reports (“FFR’s”), which are due 30 days after the end of the reporting period Condition (continued) Additionally, the Settlement did not submit required annual SF-429 Real Property Status Report within the required deadlines which is due 90 days after the reporting period per HHS requirements and terms of the award. Criteria In accordance with 2 CFR §200.328 and the applicable award terms and conditions, the Settlement is required to submit the SF-425, Federal Financial Report, and SF-429, Real Property Status Report, within the timeframes established by the federal awarding agency. Cause The condition appears to be due to insufficient internal controls over the monitoring of reporting deadlines and extensions, and the review process to ensure timely submission. Effect This condition resulted in the Settlement not being in compliance with federal reporting requirements. Untimely reporting may limit the federal agency’s ability to effectively monitor program performance and financial activity. Questioned Costs None Context No questioned costs were identified. The finding relates to the untimely submission of required reports and does not impact the allowability of program expenditures; however, timely reporting is necessary to support effective federal oversight. Recommendation We recommend that the Settlement enhance its internal control procedures over the reporting process by implementing a mechanism to track reporting deadlines and ensuring timely preparation, review, and submission of required reports. Views of Responsible Officials See Corrective Action Plan in Appendix 1.