Information on the federal program:
Subject: Special Education Cluster – Internal Controls
Federal Agency: Department of Education
Federal Program: Special Education Preschool Grants
Assistance Listing Number: 84.173, 84.173X
Federal Award Numbers and Years (or Other Identifying Numbers): 23619-00...
Information on the federal program:
Subject: Special Education Cluster – Internal Controls
Federal Agency: Department of Education
Federal Program: Special Education Preschool Grants
Assistance Listing Number: 84.173, 84.173X
Federal Award Numbers and Years (or Other Identifying Numbers): 23619-008-PN01; 22619-008-ARP
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Procurement and Suspension and Debarment
Audit Finding: Material Weakness
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 micro-purchase 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.
Contact Person Responsible for Corrective Action: Dr. Greg Roach
Contact Phone Number: 765-378-3329
Views of Responsible Official: We concur with the finding.
Description of Corrective Action Plan: During quarterly meeting with MCS Co-op, will discuss that internal controls are in place for procurement, suspension and debarment requirements are in place for purchases.
Anticipated Completion Date: 2025 next quarterly meeting with Muncie Community Schools Co-op