Audit 41129

2022-101 Lack of Appropriate Internal Controls Related to Procurement Requirements Assistance Listing Number: 10.555 and 10.553 Name of Federal Agency: United States Department of Agriculture Program Title: National School Lunch Program Compliance Requirement: Procurement Pass-through Entity: State of Florida Department of Agriculture and Consumer Services Federal Grant/Contract Number and Grant Year: N/A (2022) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Company did not obtain the necessary number of quotes for purchases over the small purchase threshold as required. The Company also does not have a process in place to verify vendors are not suspended or debarred when they are determined to be ?covered transactions.? Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, 2 CFR section 200.320(a)(2) requires that if the small purchases procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the nonfederal entity. Finally, 2 CFR 180 Subpart C requires that the nonfederal entity determine if a vendor is excluded or disqualified (i.e. suspended or debarred) before entering into a covered transaction. Cause: Staff responsible for obtaining the quotes were told to do so by management but quotes were not obtained and management did not realize this until requested for the audit. The Company staff were not aware of the requirements associated with suspension and debarment affecting purchases over $25,000. Effect: The Company may not comply with procurement compliance requirements and may purchase something from a suspended or debarred vendor. This could lead to questioned costs for the grant. Recommendation: We recommend that the Company implement appropriate review procedures to verify staff obtain quotes prior to approval of the purchase. CRI also recommends implementing procedures to verify and document vendors are not suspended or debarred prior to purchase when transactions are considered ?covered transactions.? Views of Responsible Officials and Planned Corrective Actions: The Company will implement additional procedures to make sure suspension and debarment requirements are considered as well as additional oversight procedures to verify quotes are being obtained when required. The Company has reprimanded the staff who was told to obtain the quotes and procurement procedures were taken away from the staff in the future.

2022-101 Lack of Appropriate Internal Controls Related to Procurement Requirements Assistance Listing Number: 10.555 and 10.553 Name of Federal Agency: United States Department of Agriculture Program Title: National School Lunch Program Compliance Requirement: Procurement Pass-through Entity: State of Florida Department of Agriculture and Consumer Services Federal Grant/Contract Number and Grant Year: N/A (2022) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Company did not obtain the necessary number of quotes for purchases over the small purchase threshold as required. The Company also does not have a process in place to verify vendors are not suspended or debarred when they are determined to be ?covered transactions.? Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, 2 CFR section 200.320(a)(2) requires that if the small purchases procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the nonfederal entity. Finally, 2 CFR 180 Subpart C requires that the nonfederal entity determine if a vendor is excluded or disqualified (i.e. suspended or debarred) before entering into a covered transaction. Cause: Staff responsible for obtaining the quotes were told to do so by management but quotes were not obtained and management did not realize this until requested for the audit. The Company staff were not aware of the requirements associated with suspension and debarment affecting purchases over $25,000. Effect: The Company may not comply with procurement compliance requirements and may purchase something from a suspended or debarred vendor. This could lead to questioned costs for the grant. Recommendation: We recommend that the Company implement appropriate review procedures to verify staff obtain quotes prior to approval of the purchase. CRI also recommends implementing procedures to verify and document vendors are not suspended or debarred prior to purchase when transactions are considered ?covered transactions.? Views of Responsible Officials and Planned Corrective Actions: The Company will implement additional procedures to make sure suspension and debarment requirements are considered as well as additional oversight procedures to verify quotes are being obtained when required. The Company has reprimanded the staff who was told to obtain the quotes and procurement procedures were taken away from the staff in the future.

2022-101 Lack of Appropriate Internal Controls Related to Procurement Requirements Assistance Listing Number: 10.555 and 10.553 Name of Federal Agency: United States Department of Agriculture Program Title: National School Lunch Program Compliance Requirement: Procurement Pass-through Entity: State of Florida Department of Agriculture and Consumer Services Federal Grant/Contract Number and Grant Year: N/A (2022) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Company did not obtain the necessary number of quotes for purchases over the small purchase threshold as required. The Company also does not have a process in place to verify vendors are not suspended or debarred when they are determined to be ?covered transactions.? Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, 2 CFR section 200.320(a)(2) requires that if the small purchases procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the nonfederal entity. Finally, 2 CFR 180 Subpart C requires that the nonfederal entity determine if a vendor is excluded or disqualified (i.e. suspended or debarred) before entering into a covered transaction. Cause: Staff responsible for obtaining the quotes were told to do so by management but quotes were not obtained and management did not realize this until requested for the audit. The Company staff were not aware of the requirements associated with suspension and debarment affecting purchases over $25,000. Effect: The Company may not comply with procurement compliance requirements and may purchase something from a suspended or debarred vendor. This could lead to questioned costs for the grant. Recommendation: We recommend that the Company implement appropriate review procedures to verify staff obtain quotes prior to approval of the purchase. CRI also recommends implementing procedures to verify and document vendors are not suspended or debarred prior to purchase when transactions are considered ?covered transactions.? Views of Responsible Officials and Planned Corrective Actions: The Company will implement additional procedures to make sure suspension and debarment requirements are considered as well as additional oversight procedures to verify quotes are being obtained when required. The Company has reprimanded the staff who was told to obtain the quotes and procurement procedures were taken away from the staff in the future.

2022-101 Lack of Appropriate Internal Controls Related to Procurement Requirements Assistance Listing Number: 10.555 and 10.553 Name of Federal Agency: United States Department of Agriculture Program Title: National School Lunch Program Compliance Requirement: Procurement Pass-through Entity: State of Florida Department of Agriculture and Consumer Services Federal Grant/Contract Number and Grant Year: N/A (2022) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Company did not obtain the necessary number of quotes for purchases over the small purchase threshold as required. The Company also does not have a process in place to verify vendors are not suspended or debarred when they are determined to be ?covered transactions.? Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, 2 CFR section 200.320(a)(2) requires that if the small purchases procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the nonfederal entity. Finally, 2 CFR 180 Subpart C requires that the nonfederal entity determine if a vendor is excluded or disqualified (i.e. suspended or debarred) before entering into a covered transaction. Cause: Staff responsible for obtaining the quotes were told to do so by management but quotes were not obtained and management did not realize this until requested for the audit. The Company staff were not aware of the requirements associated with suspension and debarment affecting purchases over $25,000. Effect: The Company may not comply with procurement compliance requirements and may purchase something from a suspended or debarred vendor. This could lead to questioned costs for the grant. Recommendation: We recommend that the Company implement appropriate review procedures to verify staff obtain quotes prior to approval of the purchase. CRI also recommends implementing procedures to verify and document vendors are not suspended or debarred prior to purchase when transactions are considered ?covered transactions.? Views of Responsible Officials and Planned Corrective Actions: The Company will implement additional procedures to make sure suspension and debarment requirements are considered as well as additional oversight procedures to verify quotes are being obtained when required. The Company has reprimanded the staff who was told to obtain the quotes and procurement procedures were taken away from the staff in the future.

2022-101 Lack of Appropriate Internal Controls Related to Procurement Requirements Assistance Listing Number: 10.555 and 10.553 Name of Federal Agency: United States Department of Agriculture Program Title: National School Lunch Program Compliance Requirement: Procurement Pass-through Entity: State of Florida Department of Agriculture and Consumer Services Federal Grant/Contract Number and Grant Year: N/A (2022) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Company did not obtain the necessary number of quotes for purchases over the small purchase threshold as required. The Company also does not have a process in place to verify vendors are not suspended or debarred when they are determined to be ?covered transactions.? Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, 2 CFR section 200.320(a)(2) requires that if the small purchases procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the nonfederal entity. Finally, 2 CFR 180 Subpart C requires that the nonfederal entity determine if a vendor is excluded or disqualified (i.e. suspended or debarred) before entering into a covered transaction. Cause: Staff responsible for obtaining the quotes were told to do so by management but quotes were not obtained and management did not realize this until requested for the audit. The Company staff were not aware of the requirements associated with suspension and debarment affecting purchases over $25,000. Effect: The Company may not comply with procurement compliance requirements and may purchase something from a suspended or debarred vendor. This could lead to questioned costs for the grant. Recommendation: We recommend that the Company implement appropriate review procedures to verify staff obtain quotes prior to approval of the purchase. CRI also recommends implementing procedures to verify and document vendors are not suspended or debarred prior to purchase when transactions are considered ?covered transactions.? Views of Responsible Officials and Planned Corrective Actions: The Company will implement additional procedures to make sure suspension and debarment requirements are considered as well as additional oversight procedures to verify quotes are being obtained when required. The Company has reprimanded the staff who was told to obtain the quotes and procurement procedures were taken away from the staff in the future.

2022-101 Lack of Appropriate Internal Controls Related to Procurement Requirements Assistance Listing Number: 10.555 and 10.553 Name of Federal Agency: United States Department of Agriculture Program Title: National School Lunch Program Compliance Requirement: Procurement Pass-through Entity: State of Florida Department of Agriculture and Consumer Services Federal Grant/Contract Number and Grant Year: N/A (2022) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Company did not obtain the necessary number of quotes for purchases over the small purchase threshold as required. The Company also does not have a process in place to verify vendors are not suspended or debarred when they are determined to be ?covered transactions.? Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, 2 CFR section 200.320(a)(2) requires that if the small purchases procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the nonfederal entity. Finally, 2 CFR 180 Subpart C requires that the nonfederal entity determine if a vendor is excluded or disqualified (i.e. suspended or debarred) before entering into a covered transaction. Cause: Staff responsible for obtaining the quotes were told to do so by management but quotes were not obtained and management did not realize this until requested for the audit. The Company staff were not aware of the requirements associated with suspension and debarment affecting purchases over $25,000. Effect: The Company may not comply with procurement compliance requirements and may purchase something from a suspended or debarred vendor. This could lead to questioned costs for the grant. Recommendation: We recommend that the Company implement appropriate review procedures to verify staff obtain quotes prior to approval of the purchase. CRI also recommends implementing procedures to verify and document vendors are not suspended or debarred prior to purchase when transactions are considered ?covered transactions.? Views of Responsible Officials and Planned Corrective Actions: The Company will implement additional procedures to make sure suspension and debarment requirements are considered as well as additional oversight procedures to verify quotes are being obtained when required. The Company has reprimanded the staff who was told to obtain the quotes and procurement procedures were taken away from the staff in the future.