Audit 8708

Criteria: Uniform Guidance requires expenditures to be supported by appropriately approved purchase orders and price and rate quotes from two qualified sources for small purchases between $10,000 and $249,999. In addition, written policies require approval for purchase of supplies or services by the School’s CFO and additional approval by the Finance Committee in items in excess of $25,000. Condition: Purchase orders are not being prepared and price and rate quotes are not consistently being obtained, evaluated or approved. Cause: The School has written policies and procedures regarding procurement; however, these policies and procedures were not consistently followed. Effect: Lack of effect controls over procurement could lead to unauthorized purchase and the purchase could be disallowed by the federal awarding agency Recommendation: We recommend procedures be established to monitor compliance with the School’s procurement policies to ensure purchases are properly supported with purchase orders and formal approval of purchase in accordance with the School’s policy. In addition, we recommend procedures be established to monitor compliance with Uniform Guidance related to all levels of purchases including but not limited to obtaining and analyzing price and rate quotes for all small purchases. Management Response: Management agrees with the Auditor. Management will develop an internal control manual for Federal grants to monitor compliance with the School's procurement policies to ensure purchases are properly supported with purchase orders, appropriate number of proposals in an approved format, and formally approval of purchase is being documented in accordance with the School's policy. In addition, management of the School will establish procedures to monitor compliance with Uniform Guidance related to all levels of purchases including but not limited to obtaining and analyzing price and rate quotes for all small purchases.

Criteria: Uniform Guidance requires a physical inventory to be taken every 2 years and records of property purchased under federal programs to including certain items including the following: • Description • Serial number or identification number • Source of funding including federal award • Acquisition date • Cost including federal cost or percentage • Location • Use • Condition • Disposition data • Control system to ensure adequate safeguards to prevent loss • Adequate maintenance procedure to keep property in good condition Condition: A physical inventory of property purchased under federal programs is not being performed and the records of capitalized property, plant and equipment do not contain several of the items required under Uniform guidance. Cause: The School’s policies and procedures do not address physical inventory of property, plant and equipment nor the information that should be tracked as part of property purchased under federal programs. Effect: Lack of controls could result in inaccurate equipment and real property management for purchase under federal programs resulting in limited future federal funding for such costs. Recommendation: We recommend School review current policies and procedures surrounding equipment and real property management and establish procedures related to physical inventory and retention of data required under Uniform Guidance. Management Response: Management agrees with the Auditor. Management will work with consultant and implement procedures and train staff on industry best practices on property management. The management team is also reviewing best practices on physical inventory and retention of data required under Uniform Guidance.

Criteria: Uniform Guidance requires procurement procedures to be in place to ensure entities that are entered into on covered transactions are not debarred, suspended or otherwise excluded from participating in covered transactions. Covered transactions include contracts for goods or services awarded under a non-procurement transaction (grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified by Uniform Guidance. Condition: Debarment and suspension review procedures or related controls are not in place. Cause: The School’s procurement policies and procedures do not address review for debarment or suspension. Effect: Contracts for goods or services could be awarded to entities that are debarred, suspended or otherwise excluded from participating in covered transactions. Recommendation: We recommend the School’s procurement procedures and procedures be reviewed and updated to include review of entities for debarment and suspension prior to entering into covered transactions. Management Response: Management agrees with the auditor. Management is currently reviewing the monitor compliance/procurement policies and has purchased software that will allow the School to properly create requisitions/purchase orders. The School has also adopted formal approval procedures in accordance with the School's policy and the Uniform Guidance.

Criteria: Uniform Guidance requires expenditures to be supported by appropriately approved purchase orders and price and rate quotes from two qualified sources for small purchases between $10,000 and $249,999. In addition, written policies require approval for purchase of supplies or services by the School’s CFO and additional approval by the Finance Committee in items in excess of $25,000. Condition: Purchase orders are not being prepared and price and rate quotes are not consistently being obtained, evaluated or approved. Cause: The School has written policies and procedures regarding procurement; however, these policies and procedures were not consistently followed. Effect: Lack of effect controls over procurement could lead to unauthorized purchase and the purchase could be disallowed by the federal awarding agency Recommendation: We recommend procedures be established to monitor compliance with the School’s procurement policies to ensure purchases are properly supported with purchase orders and formal approval of purchase in accordance with the School’s policy. In addition, we recommend procedures be established to monitor compliance with Uniform Guidance related to all levels of purchases including but not limited to obtaining and analyzing price and rate quotes for all small purchases. Management Response: Management agrees with the Auditor. Management will develop an internal control manual for Federal grants to monitor compliance with the School's procurement policies to ensure purchases are properly supported with purchase orders, appropriate number of proposals in an approved format, and formally approval of purchase is being documented in accordance with the School's policy. In addition, management of the School will establish procedures to monitor compliance with Uniform Guidance related to all levels of purchases including but not limited to obtaining and analyzing price and rate quotes for all small purchases.

Criteria: Uniform Guidance requires a physical inventory to be taken every 2 years and records of property purchased under federal programs to including certain items including the following: • Description • Serial number or identification number • Source of funding including federal award • Acquisition date • Cost including federal cost or percentage • Location • Use • Condition • Disposition data • Control system to ensure adequate safeguards to prevent loss • Adequate maintenance procedure to keep property in good condition Condition: A physical inventory of property purchased under federal programs is not being performed and the records of capitalized property, plant and equipment do not contain several of the items required under Uniform guidance. Cause: The School’s policies and procedures do not address physical inventory of property, plant and equipment nor the information that should be tracked as part of property purchased under federal programs. Effect: Lack of controls could result in inaccurate equipment and real property management for purchase under federal programs resulting in limited future federal funding for such costs. Recommendation: We recommend School review current policies and procedures surrounding equipment and real property management and establish procedures related to physical inventory and retention of data required under Uniform Guidance. Management Response: Management agrees with the Auditor. Management will work with consultant and implement procedures and train staff on industry best practices on property management. The management team is also reviewing best practices on physical inventory and retention of data required under Uniform Guidance.

Criteria: Uniform Guidance requires procurement procedures to be in place to ensure entities that are entered into on covered transactions are not debarred, suspended or otherwise excluded from participating in covered transactions. Covered transactions include contracts for goods or services awarded under a non-procurement transaction (grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified by Uniform Guidance. Condition: Debarment and suspension review procedures or related controls are not in place. Cause: The School’s procurement policies and procedures do not address review for debarment or suspension. Effect: Contracts for goods or services could be awarded to entities that are debarred, suspended or otherwise excluded from participating in covered transactions. Recommendation: We recommend the School’s procurement procedures and procedures be reviewed and updated to include review of entities for debarment and suspension prior to entering into covered transactions. Management Response: Management agrees with the auditor. Management is currently reviewing the monitor compliance/procurement policies and has purchased software that will allow the School to properly create requisitions/purchase orders. The School has also adopted formal approval procedures in accordance with the School's policy and the Uniform Guidance.