Audit 44945

FY End
2022-06-30
Total Expended
$2.17M
Findings
6
Programs
9
Organization: North Miami Community Schools (IN)
Year: 2022 Accepted: 2023-03-29
Auditor: Crowe LLP

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
39061 2022-002 Material Weakness - I
39062 2022-002 Material Weakness - I
39063 2022-002 Material Weakness - I
615503 2022-002 Material Weakness - I
615504 2022-002 Material Weakness - I
615505 2022-002 Material Weakness - I

Programs

ALN Program Spent Major Findings
10.555 National School Lunch Program $700,401 Yes 1
84.425 Covid-19 - Education Stabilization Fund $138,572 - 0
10.553 School Breakfast Program $92,139 Yes 1
84.010 Title I Grants to Local Educational Agencies $75,993 - 0
84.027 Special Education_grants to States $55,040 - 0
93.778 Medical Assistance Program $46,975 - 0
84.367 Supporting Effective Instruction State Grants $37,529 - 0
84.173 Special Education_preschool Grants $1,306 - 0
84.424 Student Support and Academic Enrichment Program $1,195 - 0

Contacts

Name Title Type
JAZNZL9A9MM5 Serena Francis Auditee
7659852931 Scott Nickerson Auditor
No contacts on file

Notes to SEFA

Title: NOTE 3 - OTHER INFORMATION Accounting Policies: NOTE 1 - BASIS OF PRESENTATION A. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (SEFA) includes the federal grant activity of the School Corporation under programs of the federal government for the period of July 1, 2020 to June 30, 2022. The information in the SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the SEFA presents only a select portion of the operations of the School Corporation, it is not intended to and does not present the financial position of the School Corporation. The Uniform Guidance requires an annual audit of nonfederal entities expending a total amount of federal awards equal to or in excess of $750,000 in any fiscal year unless by constitution or statute a less frequent audit is required. In accordance with Indiana Code (IC 5-11-1-25), audits of school corporations shall be conducted biennially. Such audits shall include both years within the biennial period. B. Other Significant Accounting Policies Expenditures reported on the SEFA are reported on the cash basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to reimbursement. When federal grants are received on a reimbursement basis, the federal awards are considered expended when the reimbursement is received. De Minimis Rate Used: N Rate Explanation: NOTE 2 - INDIRECT COST RATEThe School Corporation has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The School Corporation did not have any subrecipient activity for the period July 1, 2020 to June 30, 2022.

Finding Details

FINDING 2022-002 Information on the federal program: Subject: Child Nutrition Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion, Noncompliance Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: There were two small purchase method procurements selected for sample testing for the audit period. One procurement was performed by the School?s Service Center, Wilson Education Center (Service Center). During the 2020-2021 school year, the Service Center solicited, evaluated, and awarded a bid for the milk on behalf of its members that School Corporation used. The Service Center was not audited for the 2020-2021 school year. During our testing of procurement and suspension and debarment for 2020-2021, it was noted that the School Corporation was not have a review control in place to monitor that the Service Center performed all necessary procedures to maintain compliance with federal regulations surrounding procurement and suspension and debarment. For 2020-2021, the School Corporation obtained procurement documents from the Service Center supporting procurements performed during the audit period. There was no documented review control in place at the School Corporation to ensure proper monitoring of the Service Center activities occur to verify federal procurement regulations were followed by the Service Center. There was one vendor that exceeded the $10,000 threshold for the School Corporation during fiscal year 2020-2021 that would require a procurement check. The error in the sample procurement performed by the Service Center selected for testing was isolated to fiscal year 2020-2021. The amount paid to the vendor for 2020-2021 was $22,211. The vendor did not met the suspension and debarment threshold ($25,000) for fiscal year 2020-2021. Proper controls over the same vendor selected for procurement and debarment and suspension were in place for the fiscal year 2021-2022 The second procurement selected for testing was a small purchase performed by the School Corporation for food purchases totaling $103,671 in fiscal year 2020-2021 and $142,368 in fiscal year 2021-2022. We noted that the School Corporation did not obtain three quotes from separate vendors. Additionally, the School Corporation did not perform a suspension and debarment check on the vendor sampled for fiscal years 2020-2021 and 2021-2022. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish controls to ensure compliance with Procurement and Suspension and Debarment compliance requirement. We recommend that management meet periodically with the Wilson Education Center and review and maintain procurement contract files as evidence of proper periodic monitoring of the Service Center. Additionally, we recommended that the School Corporation's management establish a system of internal controls related to ensure that 3 quotes are obtained as required for small purchase method procurements and to ensure the vendors are not debarred or suspended for small purchases procurements performed by the School Corporation. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Child Nutrition Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion, Noncompliance Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: There were two small purchase method procurements selected for sample testing for the audit period. One procurement was performed by the School?s Service Center, Wilson Education Center (Service Center). During the 2020-2021 school year, the Service Center solicited, evaluated, and awarded a bid for the milk on behalf of its members that School Corporation used. The Service Center was not audited for the 2020-2021 school year. During our testing of procurement and suspension and debarment for 2020-2021, it was noted that the School Corporation was not have a review control in place to monitor that the Service Center performed all necessary procedures to maintain compliance with federal regulations surrounding procurement and suspension and debarment. For 2020-2021, the School Corporation obtained procurement documents from the Service Center supporting procurements performed during the audit period. There was no documented review control in place at the School Corporation to ensure proper monitoring of the Service Center activities occur to verify federal procurement regulations were followed by the Service Center. There was one vendor that exceeded the $10,000 threshold for the School Corporation during fiscal year 2020-2021 that would require a procurement check. The error in the sample procurement performed by the Service Center selected for testing was isolated to fiscal year 2020-2021. The amount paid to the vendor for 2020-2021 was $22,211. The vendor did not met the suspension and debarment threshold ($25,000) for fiscal year 2020-2021. Proper controls over the same vendor selected for procurement and debarment and suspension were in place for the fiscal year 2021-2022 The second procurement selected for testing was a small purchase performed by the School Corporation for food purchases totaling $103,671 in fiscal year 2020-2021 and $142,368 in fiscal year 2021-2022. We noted that the School Corporation did not obtain three quotes from separate vendors. Additionally, the School Corporation did not perform a suspension and debarment check on the vendor sampled for fiscal years 2020-2021 and 2021-2022. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish controls to ensure compliance with Procurement and Suspension and Debarment compliance requirement. We recommend that management meet periodically with the Wilson Education Center and review and maintain procurement contract files as evidence of proper periodic monitoring of the Service Center. Additionally, we recommended that the School Corporation's management establish a system of internal controls related to ensure that 3 quotes are obtained as required for small purchase method procurements and to ensure the vendors are not debarred or suspended for small purchases procurements performed by the School Corporation. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Child Nutrition Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion, Noncompliance Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: There were two small purchase method procurements selected for sample testing for the audit period. One procurement was performed by the School?s Service Center, Wilson Education Center (Service Center). During the 2020-2021 school year, the Service Center solicited, evaluated, and awarded a bid for the milk on behalf of its members that School Corporation used. The Service Center was not audited for the 2020-2021 school year. During our testing of procurement and suspension and debarment for 2020-2021, it was noted that the School Corporation was not have a review control in place to monitor that the Service Center performed all necessary procedures to maintain compliance with federal regulations surrounding procurement and suspension and debarment. For 2020-2021, the School Corporation obtained procurement documents from the Service Center supporting procurements performed during the audit period. There was no documented review control in place at the School Corporation to ensure proper monitoring of the Service Center activities occur to verify federal procurement regulations were followed by the Service Center. There was one vendor that exceeded the $10,000 threshold for the School Corporation during fiscal year 2020-2021 that would require a procurement check. The error in the sample procurement performed by the Service Center selected for testing was isolated to fiscal year 2020-2021. The amount paid to the vendor for 2020-2021 was $22,211. The vendor did not met the suspension and debarment threshold ($25,000) for fiscal year 2020-2021. Proper controls over the same vendor selected for procurement and debarment and suspension were in place for the fiscal year 2021-2022 The second procurement selected for testing was a small purchase performed by the School Corporation for food purchases totaling $103,671 in fiscal year 2020-2021 and $142,368 in fiscal year 2021-2022. We noted that the School Corporation did not obtain three quotes from separate vendors. Additionally, the School Corporation did not perform a suspension and debarment check on the vendor sampled for fiscal years 2020-2021 and 2021-2022. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish controls to ensure compliance with Procurement and Suspension and Debarment compliance requirement. We recommend that management meet periodically with the Wilson Education Center and review and maintain procurement contract files as evidence of proper periodic monitoring of the Service Center. Additionally, we recommended that the School Corporation's management establish a system of internal controls related to ensure that 3 quotes are obtained as required for small purchase method procurements and to ensure the vendors are not debarred or suspended for small purchases procurements performed by the School Corporation. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Child Nutrition Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion, Noncompliance Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: There were two small purchase method procurements selected for sample testing for the audit period. One procurement was performed by the School?s Service Center, Wilson Education Center (Service Center). During the 2020-2021 school year, the Service Center solicited, evaluated, and awarded a bid for the milk on behalf of its members that School Corporation used. The Service Center was not audited for the 2020-2021 school year. During our testing of procurement and suspension and debarment for 2020-2021, it was noted that the School Corporation was not have a review control in place to monitor that the Service Center performed all necessary procedures to maintain compliance with federal regulations surrounding procurement and suspension and debarment. For 2020-2021, the School Corporation obtained procurement documents from the Service Center supporting procurements performed during the audit period. There was no documented review control in place at the School Corporation to ensure proper monitoring of the Service Center activities occur to verify federal procurement regulations were followed by the Service Center. There was one vendor that exceeded the $10,000 threshold for the School Corporation during fiscal year 2020-2021 that would require a procurement check. The error in the sample procurement performed by the Service Center selected for testing was isolated to fiscal year 2020-2021. The amount paid to the vendor for 2020-2021 was $22,211. The vendor did not met the suspension and debarment threshold ($25,000) for fiscal year 2020-2021. Proper controls over the same vendor selected for procurement and debarment and suspension were in place for the fiscal year 2021-2022 The second procurement selected for testing was a small purchase performed by the School Corporation for food purchases totaling $103,671 in fiscal year 2020-2021 and $142,368 in fiscal year 2021-2022. We noted that the School Corporation did not obtain three quotes from separate vendors. Additionally, the School Corporation did not perform a suspension and debarment check on the vendor sampled for fiscal years 2020-2021 and 2021-2022. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish controls to ensure compliance with Procurement and Suspension and Debarment compliance requirement. We recommend that management meet periodically with the Wilson Education Center and review and maintain procurement contract files as evidence of proper periodic monitoring of the Service Center. Additionally, we recommended that the School Corporation's management establish a system of internal controls related to ensure that 3 quotes are obtained as required for small purchase method procurements and to ensure the vendors are not debarred or suspended for small purchases procurements performed by the School Corporation. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Child Nutrition Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion, Noncompliance Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: There were two small purchase method procurements selected for sample testing for the audit period. One procurement was performed by the School?s Service Center, Wilson Education Center (Service Center). During the 2020-2021 school year, the Service Center solicited, evaluated, and awarded a bid for the milk on behalf of its members that School Corporation used. The Service Center was not audited for the 2020-2021 school year. During our testing of procurement and suspension and debarment for 2020-2021, it was noted that the School Corporation was not have a review control in place to monitor that the Service Center performed all necessary procedures to maintain compliance with federal regulations surrounding procurement and suspension and debarment. For 2020-2021, the School Corporation obtained procurement documents from the Service Center supporting procurements performed during the audit period. There was no documented review control in place at the School Corporation to ensure proper monitoring of the Service Center activities occur to verify federal procurement regulations were followed by the Service Center. There was one vendor that exceeded the $10,000 threshold for the School Corporation during fiscal year 2020-2021 that would require a procurement check. The error in the sample procurement performed by the Service Center selected for testing was isolated to fiscal year 2020-2021. The amount paid to the vendor for 2020-2021 was $22,211. The vendor did not met the suspension and debarment threshold ($25,000) for fiscal year 2020-2021. Proper controls over the same vendor selected for procurement and debarment and suspension were in place for the fiscal year 2021-2022 The second procurement selected for testing was a small purchase performed by the School Corporation for food purchases totaling $103,671 in fiscal year 2020-2021 and $142,368 in fiscal year 2021-2022. We noted that the School Corporation did not obtain three quotes from separate vendors. Additionally, the School Corporation did not perform a suspension and debarment check on the vendor sampled for fiscal years 2020-2021 and 2021-2022. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish controls to ensure compliance with Procurement and Suspension and Debarment compliance requirement. We recommend that management meet periodically with the Wilson Education Center and review and maintain procurement contract files as evidence of proper periodic monitoring of the Service Center. Additionally, we recommended that the School Corporation's management establish a system of internal controls related to ensure that 3 quotes are obtained as required for small purchase method procurements and to ensure the vendors are not debarred or suspended for small purchases procurements performed by the School Corporation. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Child Nutrition Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion, Noncompliance Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: There were two small purchase method procurements selected for sample testing for the audit period. One procurement was performed by the School?s Service Center, Wilson Education Center (Service Center). During the 2020-2021 school year, the Service Center solicited, evaluated, and awarded a bid for the milk on behalf of its members that School Corporation used. The Service Center was not audited for the 2020-2021 school year. During our testing of procurement and suspension and debarment for 2020-2021, it was noted that the School Corporation was not have a review control in place to monitor that the Service Center performed all necessary procedures to maintain compliance with federal regulations surrounding procurement and suspension and debarment. For 2020-2021, the School Corporation obtained procurement documents from the Service Center supporting procurements performed during the audit period. There was no documented review control in place at the School Corporation to ensure proper monitoring of the Service Center activities occur to verify federal procurement regulations were followed by the Service Center. There was one vendor that exceeded the $10,000 threshold for the School Corporation during fiscal year 2020-2021 that would require a procurement check. The error in the sample procurement performed by the Service Center selected for testing was isolated to fiscal year 2020-2021. The amount paid to the vendor for 2020-2021 was $22,211. The vendor did not met the suspension and debarment threshold ($25,000) for fiscal year 2020-2021. Proper controls over the same vendor selected for procurement and debarment and suspension were in place for the fiscal year 2021-2022 The second procurement selected for testing was a small purchase performed by the School Corporation for food purchases totaling $103,671 in fiscal year 2020-2021 and $142,368 in fiscal year 2021-2022. We noted that the School Corporation did not obtain three quotes from separate vendors. Additionally, the School Corporation did not perform a suspension and debarment check on the vendor sampled for fiscal years 2020-2021 and 2021-2022. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish controls to ensure compliance with Procurement and Suspension and Debarment compliance requirement. We recommend that management meet periodically with the Wilson Education Center and review and maintain procurement contract files as evidence of proper periodic monitoring of the Service Center. Additionally, we recommended that the School Corporation's management establish a system of internal controls related to ensure that 3 quotes are obtained as required for small purchase method procurements and to ensure the vendors are not debarred or suspended for small purchases procurements performed by the School Corporation. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.