Finding 2023-001 – Special Educaon Cluster – Procurement and Suspension and Debarment
Subject: Special Education Cluster (IDEA)
Audit Findings: Material Weakness, Other Matters
Condition and Context: The School Corporation is a member of the Delaware-Blackford Special
Education Cooperative (Coopera...
Finding 2023-001 – Special Educaon Cluster – Procurement and Suspension and Debarment
Subject: Special Education Cluster (IDEA)
Audit Findings: Material Weakness, Other Matters
Condition and Context: The School Corporation is a member of the Delaware-Blackford Special
Education Cooperative (Cooperative). During fiscal year 2022-2023, the Cooperative operated the special
education preschool program and spent the federal money on behalf of six of its seven members. As the
grant agreements were between the Indiana Department of Education and each member school, the School
Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was
inadequate oversight performed by the School Corporation in order to ensure compliance with the
Procurement and Suspension and Debarment compliance requirement.
The School Corporation did not have internal controls in place to ensure that the Cooperative complied with
the procurement and the suspension and debarment requirements. The Cooperative did not have adequate
procedures in place to ensure that the requirements for small purchases were met for each applicable
procured good or service or to ensure that vendors were not suspended or debarred prior to entering into
a covered transaction.
Procurement
Federal regulations allow for informal procurement methods when the value of the procurement for goods
or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000.
However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase
procedures may be used. This informal process allows for methods other than the formal bid process. The
informal process is divided between two methods based on thresholds. Micro-purchases, typically for those
purchases $10,000 or under, and small purchase procedures for those purchases above the micropurchase
threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded
without soliciting competitive price rate quotations. If small purchase procedures are used, then price or
rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single
source provider can be used for a small purchase, documentation must be retained supporting the
determination.
Two vendors exceeded the small purchase threshold during the audit period. The Cooperative provided
evidence of a quote being obtained for the first vendor, however, evidence of obtaining multiple quotes was
not retained for audit. The chosen quote was attached to the accounts payable vouchers and provided for
audit; however, the other quotes obtained for the purchase were not maintained. For the second vendor,
the Cooperative determined psychological services were to be provided by a single source provider,
however, they did not have a documented rationale or support for the decision. Documentation detailing
the history of procurement, which must include the reason for the procurement method used, selection of
the vendor, and the basis for the price, was not available for audit for either purchase.
Suspension and Debarment
The School Corporation did not have internal controls in place to ensure compliance with the suspension
and debarment requirement. The Cooperative did not have adequate internal controls in place to ensure
all applicable vendors were not suspended or debarred prior to entering into a covered transaction. As
such, the Cooperative entered into a contract totaling $32,388, which exceeded $25,000, for psychological
services. The Cooperative did not perform procedures to ensure that the vendor was not suspended or
debarred from participation in federal programs.
The lack of internal controls and noncompliance were systemic issues throughout the audit period.
Views of Responsible Official: We concur with the finding.
Descripon of Correcve Acon Plan: As a member of the Delaware-Blackford Special Educaon
Cooperave (DBSEC), Yorktown Community Schools will obtain in wring from Muncie
Community Schools that their correcve acon plans for procurement and suspension and
debarment have been implemented.
Responsible Party and Timeline for Compleon: Greg Hinshaw, Superintendent of Yorktown
Community Schools and DBSEC Board Member. Timeline for compleon March 31, 2024