Assistance Listing Number, Federal Agency, and Program Name - ALN 21.027, Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Significant deficiency and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.332 (a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and, if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward. Required information includes the following: (1) Federal award identification (i) Subrecipient name (which must match the name associated with its unique entity identifier) (ii) Subrecipient's unique entity identifier (iii) Federal Award Identification Number (FAIN) (iv) Federal award date (see the definition of federal award date in ? 200.1 of this part) of award to the recipient by the federal agency (v) Subaward period of performance start and end date (vi) Subaward budget period start and end date (vii) Amount of federal funds obligated by this action by the pass-through entity to the subrecipient (viii) Total amount of federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation (ix) Total amount of the federal award committed to the subrecipient by the pass-through entity (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA) (xi) Name of federal awarding agency, pass-through entity, and contact information for awarding official of the pass-through entity (xii) Assistance Listing Numbers and title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listing Numbers at time of disbursement (xiii) Identification of whether the award is R&D (xiv) Indirect cost rate for the federal award (including if the de minimis rate is charged) per ? 200.414 Condition - The CSLFRF subrecipient agreements did not include the CSLFRF assistance Listing Number (ALN), as required per 2 CFR 200.332 (a)(1)(xii). Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During the fiscal year, the City passed through CSLFRF funding to three subrecipients. The agreements with the subrecipients included a reference to the applicable regulations provided by the Treasury and all the elements outlined under 2 CFR 200.331 (a)(1) with the exception of the ALN. Cause and Effect - The City?s controls did not ensure that the subrecipient agreements included all the required elements, as outlined under 2 CFR 200.332 (a)(1). The lack of information could result in noncompliance by the subrecipient, as well as incorrect SEFA reporting. Recommendation - We recommend the City implement adequate controls to ensure subrecipient agreements included all the required elements, as outlined under 2 CFR 200.332 a)(1). Views of Responsible Officials and Planned Corrective Actions - The City has implemented a process to ensure that all subrecipient agreements contain the federal ALN, as required by 2 CFR 200.332. All subrecipient agreements will include a new exhibit as an attachment in the agreement that will include the ALN and any other required grant elements.
Assistance Listing Number, Federal Agency, and Program Name - ALN 21.027, Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Significant deficiency and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.332 (a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and, if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward. Required information includes the following: (1) Federal award identification (i) Subrecipient name (which must match the name associated with its unique entity identifier) (ii) Subrecipient's unique entity identifier (iii) Federal Award Identification Number (FAIN) (iv) Federal award date (see the definition of federal award date in ? 200.1 of this part) of award to the recipient by the federal agency (v) Subaward period of performance start and end date (vi) Subaward budget period start and end date (vii) Amount of federal funds obligated by this action by the pass-through entity to the subrecipient (viii) Total amount of federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation (ix) Total amount of the federal award committed to the subrecipient by the pass-through entity (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA) (xi) Name of federal awarding agency, pass-through entity, and contact information for awarding official of the pass-through entity (xii) Assistance Listing Numbers and title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listing Numbers at time of disbursement (xiii) Identification of whether the award is R&D (xiv) Indirect cost rate for the federal award (including if the de minimis rate is charged) per ? 200.414 Condition - The CSLFRF subrecipient agreements did not include the CSLFRF assistance Listing Number (ALN), as required per 2 CFR 200.332 (a)(1)(xii). Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During the fiscal year, the City passed through CSLFRF funding to three subrecipients. The agreements with the subrecipients included a reference to the applicable regulations provided by the Treasury and all the elements outlined under 2 CFR 200.331 (a)(1) with the exception of the ALN. Cause and Effect - The City?s controls did not ensure that the subrecipient agreements included all the required elements, as outlined under 2 CFR 200.332 (a)(1). The lack of information could result in noncompliance by the subrecipient, as well as incorrect SEFA reporting. Recommendation - We recommend the City implement adequate controls to ensure subrecipient agreements included all the required elements, as outlined under 2 CFR 200.332 a)(1). Views of Responsible Officials and Planned Corrective Actions - The City has implemented a process to ensure that all subrecipient agreements contain the federal ALN, as required by 2 CFR 200.332. All subrecipient agreements will include a new exhibit as an attachment in the agreement that will include the ALN and any other required grant elements.
Assistance Listing Number, Federal Agency, and Program Name - ALN 21.027, Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Significant deficiency and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.332 (a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and, if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward. Required information includes the following: (1) Federal award identification (i) Subrecipient name (which must match the name associated with its unique entity identifier) (ii) Subrecipient's unique entity identifier (iii) Federal Award Identification Number (FAIN) (iv) Federal award date (see the definition of federal award date in ? 200.1 of this part) of award to the recipient by the federal agency (v) Subaward period of performance start and end date (vi) Subaward budget period start and end date (vii) Amount of federal funds obligated by this action by the pass-through entity to the subrecipient (viii) Total amount of federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation (ix) Total amount of the federal award committed to the subrecipient by the pass-through entity (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA) (xi) Name of federal awarding agency, pass-through entity, and contact information for awarding official of the pass-through entity (xii) Assistance Listing Numbers and title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listing Numbers at time of disbursement (xiii) Identification of whether the award is R&D (xiv) Indirect cost rate for the federal award (including if the de minimis rate is charged) per ? 200.414 Condition - The CSLFRF subrecipient agreements did not include the CSLFRF assistance Listing Number (ALN), as required per 2 CFR 200.332 (a)(1)(xii). Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During the fiscal year, the City passed through CSLFRF funding to three subrecipients. The agreements with the subrecipients included a reference to the applicable regulations provided by the Treasury and all the elements outlined under 2 CFR 200.331 (a)(1) with the exception of the ALN. Cause and Effect - The City?s controls did not ensure that the subrecipient agreements included all the required elements, as outlined under 2 CFR 200.332 (a)(1). The lack of information could result in noncompliance by the subrecipient, as well as incorrect SEFA reporting. Recommendation - We recommend the City implement adequate controls to ensure subrecipient agreements included all the required elements, as outlined under 2 CFR 200.332 a)(1). Views of Responsible Officials and Planned Corrective Actions - The City has implemented a process to ensure that all subrecipient agreements contain the federal ALN, as required by 2 CFR 200.332. All subrecipient agreements will include a new exhibit as an attachment in the agreement that will include the ALN and any other required grant elements.
Assistance Listing Number, Federal Agency, and Program Name - ALN 21.027, Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Significant deficiency and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.332 (a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and, if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward. Required information includes the following: (1) Federal award identification (i) Subrecipient name (which must match the name associated with its unique entity identifier) (ii) Subrecipient's unique entity identifier (iii) Federal Award Identification Number (FAIN) (iv) Federal award date (see the definition of federal award date in ? 200.1 of this part) of award to the recipient by the federal agency (v) Subaward period of performance start and end date (vi) Subaward budget period start and end date (vii) Amount of federal funds obligated by this action by the pass-through entity to the subrecipient (viii) Total amount of federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation (ix) Total amount of the federal award committed to the subrecipient by the pass-through entity (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA) (xi) Name of federal awarding agency, pass-through entity, and contact information for awarding official of the pass-through entity (xii) Assistance Listing Numbers and title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listing Numbers at time of disbursement (xiii) Identification of whether the award is R&D (xiv) Indirect cost rate for the federal award (including if the de minimis rate is charged) per ? 200.414 Condition - The CSLFRF subrecipient agreements did not include the CSLFRF assistance Listing Number (ALN), as required per 2 CFR 200.332 (a)(1)(xii). Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During the fiscal year, the City passed through CSLFRF funding to three subrecipients. The agreements with the subrecipients included a reference to the applicable regulations provided by the Treasury and all the elements outlined under 2 CFR 200.331 (a)(1) with the exception of the ALN. Cause and Effect - The City?s controls did not ensure that the subrecipient agreements included all the required elements, as outlined under 2 CFR 200.332 (a)(1). The lack of information could result in noncompliance by the subrecipient, as well as incorrect SEFA reporting. Recommendation - We recommend the City implement adequate controls to ensure subrecipient agreements included all the required elements, as outlined under 2 CFR 200.332 a)(1). Views of Responsible Officials and Planned Corrective Actions - The City has implemented a process to ensure that all subrecipient agreements contain the federal ALN, as required by 2 CFR 200.332. All subrecipient agreements will include a new exhibit as an attachment in the agreement that will include the ALN and any other required grant elements.
Assistance Listing Number, Federal Agency, and Program Name - ALN 21.027, Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) Federal Award Identification Number and Year - N/A Pass-through Entity - N/A Finding Type - Significant deficiency and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.332 (a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and, if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the federal award and subaward. Required information includes the following: (1) Federal award identification (i) Subrecipient name (which must match the name associated with its unique entity identifier) (ii) Subrecipient's unique entity identifier (iii) Federal Award Identification Number (FAIN) (iv) Federal award date (see the definition of federal award date in ? 200.1 of this part) of award to the recipient by the federal agency (v) Subaward period of performance start and end date (vi) Subaward budget period start and end date (vii) Amount of federal funds obligated by this action by the pass-through entity to the subrecipient (viii) Total amount of federal funds obligated to the subrecipient by the pass-through entity, including the current financial obligation (ix) Total amount of the federal award committed to the subrecipient by the pass-through entity (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA) (xi) Name of federal awarding agency, pass-through entity, and contact information for awarding official of the pass-through entity (xii) Assistance Listing Numbers and title; the pass-through entity must identify the dollar amount made available under each federal award and the Assistance Listing Numbers at time of disbursement (xiii) Identification of whether the award is R&D (xiv) Indirect cost rate for the federal award (including if the de minimis rate is charged) per ? 200.414 Condition - The CSLFRF subrecipient agreements did not include the CSLFRF assistance Listing Number (ALN), as required per 2 CFR 200.332 (a)(1)(xii). Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During the fiscal year, the City passed through CSLFRF funding to three subrecipients. The agreements with the subrecipients included a reference to the applicable regulations provided by the Treasury and all the elements outlined under 2 CFR 200.331 (a)(1) with the exception of the ALN. Cause and Effect - The City?s controls did not ensure that the subrecipient agreements included all the required elements, as outlined under 2 CFR 200.332 (a)(1). The lack of information could result in noncompliance by the subrecipient, as well as incorrect SEFA reporting. Recommendation - We recommend the City implement adequate controls to ensure subrecipient agreements included all the required elements, as outlined under 2 CFR 200.332 a)(1). Views of Responsible Officials and Planned Corrective Actions - The City has implemented a process to ensure that all subrecipient agreements contain the federal ALN, as required by 2 CFR 200.332. All subrecipient agreements will include a new exhibit as an attachment in the agreement that will include the ALN and any other required grant elements.
Assistance Listing Number, Federal Agency, and Program Name - ALN 93.914, Department of Health and Human Services, HIV Emergency Relief Project Grants Federal Award Identification Number and Year - H89HA00021 29-01, H89HA00021-30-00 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Criteria Per 2 CFR 200.331 (b) Contractors. A contract is for the purpose of obtaining goods and services for the nonfederal entity's own use and creates a procurement relationship with the contractor. See the definition of contract in ? 200.1 of this part. Characteristics indicative of a procurement relationship between the nonfederal entity and a contractor are when the contractor: (1) Provides the goods and services within normal business operations (2) Provides similar goods or services to many different purchasers (3) Normally operates in a competitive environment (4) Provides goods or services that are ancillary to the operation of the Federal program (5) Is not subject to compliance requirements of the federal program as a result of the agreement, though similar requirements may apply for other reasons Condition - We noted that the City?s contractor was a party to the agreements with the City?s subrecipients. Based on the definition of a subaward as defined by Uniform Guidance (UG), a subaward is provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. Further, a pass-through entity is defined as a nonfederal entity that provides a subaward to a subrecipient to carry out part of a federal program. A contractor is not a pass-through entity. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The City?s contractor selected the City?s 15 subrecipients and entered into a subaward agreement with each of them. In addition to the contractor?s signature, the City was also a signer of the agreement. It was noted that the City performed the monitoring of the 15 subrecipients as required by UG. Cause and Effect - The City?s relationship with the contractor changed recently from a fiduciary relationship to a contractor relationship, and certain responsibilities that were more in line with a subrecipient characteristic were retained in the contract. The City is responsible for evaluating agreements to assess whether a subrecipient or contractor relationship exists. The inclusion of programmatic decisions within an agreement could result in an inappropriate conclusion as to whether a subrecipient or contractor relationship exists and the City not performing appropriate oversight procedures. Recommendation - We recommend that the City review the contract and ensure that the scope of services excludes responsibilities that might apply to a subrecipient rather than a contractor and verify that adequate oversight controls are in place. Views of Responsible Officials and Planned Corrective Actions - The City will implement a process to ensure that its contractors do not enter into subrecipient agreements on behalf of the City. This will be monitored by ensuring that the contractors scope of work does not include solicitating and contracting with organizations as subrecipients. The City will issue its own Notice of Funding Availability (NOFA) application and directly enter into subrecipient agreements with qualified organizations.
Assistance Listing Number, Federal Agency, and Program Name - ALN 93.914, Department of Health and Human Services, HIV Emergency Relief Project Grants Federal Award Identification Number and Year - H89HA00021 29-01, H89HA00021-30-00 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Criteria Per 2 CFR 200.331 (b) Contractors. A contract is for the purpose of obtaining goods and services for the nonfederal entity's own use and creates a procurement relationship with the contractor. See the definition of contract in ? 200.1 of this part. Characteristics indicative of a procurement relationship between the nonfederal entity and a contractor are when the contractor: (1) Provides the goods and services within normal business operations (2) Provides similar goods or services to many different purchasers (3) Normally operates in a competitive environment (4) Provides goods or services that are ancillary to the operation of the Federal program (5) Is not subject to compliance requirements of the federal program as a result of the agreement, though similar requirements may apply for other reasons Condition - We noted that the City?s contractor was a party to the agreements with the City?s subrecipients. Based on the definition of a subaward as defined by Uniform Guidance (UG), a subaward is provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. Further, a pass-through entity is defined as a nonfederal entity that provides a subaward to a subrecipient to carry out part of a federal program. A contractor is not a pass-through entity. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The City?s contractor selected the City?s 15 subrecipients and entered into a subaward agreement with each of them. In addition to the contractor?s signature, the City was also a signer of the agreement. It was noted that the City performed the monitoring of the 15 subrecipients as required by UG. Cause and Effect - The City?s relationship with the contractor changed recently from a fiduciary relationship to a contractor relationship, and certain responsibilities that were more in line with a subrecipient characteristic were retained in the contract. The City is responsible for evaluating agreements to assess whether a subrecipient or contractor relationship exists. The inclusion of programmatic decisions within an agreement could result in an inappropriate conclusion as to whether a subrecipient or contractor relationship exists and the City not performing appropriate oversight procedures. Recommendation - We recommend that the City review the contract and ensure that the scope of services excludes responsibilities that might apply to a subrecipient rather than a contractor and verify that adequate oversight controls are in place. Views of Responsible Officials and Planned Corrective Actions - The City will implement a process to ensure that its contractors do not enter into subrecipient agreements on behalf of the City. This will be monitored by ensuring that the contractors scope of work does not include solicitating and contracting with organizations as subrecipients. The City will issue its own Notice of Funding Availability (NOFA) application and directly enter into subrecipient agreements with qualified organizations.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. Suspension and Debarment Non-federal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000) . . . . (d) if the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. Suspension and Debarment Non-federal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000) . . . . (d) if the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. Suspension and Debarment Non-federal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000) . . . . (d) if the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. Suspension and Debarment Non-federal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000) . . . . (d) if the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. Suspension and Debarment Non-federal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000) . . . . (d) if the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. Suspension and Debarment Non-federal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000) . . . . (d) if the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. Suspension and Debarment Non-federal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000) . . . . (d) if the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. Suspension and Debarment Non-federal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000) . . . . (d) if the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) 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. . . ." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) 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. . . ." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) 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. . . ." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) 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. . . ." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) 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. . . ." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) 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. . . ." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) 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. . . ." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) 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. . . ." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) 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. . . ." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-010 Subject: Special Education Cluster (IDEA) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-138-PN01, 21619-138-PN01, 22611-138-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. The School Corporation had not established an effective system of internal controls to ensure that proper documentation was retained for audit. The School Corporation was unable to provide supporting documentation for one of the two journal entries tested. For the one journal entry, we were unable to determine if the Special Education fund transfers in, totaling $619,180, and transfers out, totaling $554,684, were for allowable activities and costs for the program. In addition, we were unable to determine if the transfers were for transactions that occurred within the period of performance. The lack of internal controls and the failure to retain supporting documentation was isolated to the transfers noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 40 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 300.202(a) states: "General. Amounts provided to the LEA under Part B of the Act - (1) Must be expended in accordance with the applicable provisions of this part; (2) Must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with paragraph (b) of this section; and (3) Must be used to supplement State, local, and other Federal funds and not to supplant those funds." 34 CFR 300.208 states: "(a) Uses. Notwithstanding ?? 300.202, 300.203(b), and 300.162(b), funds provided to an LEA under Part B of the Act may be used for the following activities: (1) Services and aids that also benefit nondisabled children. For the costs of special education and related services, and supplementary aids and services, provided in a regular class or other education-related setting to a child with a disability in accordance with the IEP of the child, even if one or more nondisabled children benefit from these services. (2) Early intervening services. To develop and implement coordinated, early intervening educational services in accordance with ? 300.226. (3) High cost special education and related services. To establish and implement cost or risk sharing funds, consortia, or cooperatives for the LEA itself, or for LEAs working in a consortium of which the LEA is a part, to pay for high cost special education and related services. (b) Administrative case management. An LEA may use funds received under Part B of the Act to purchase appropriate technology for recordkeeping, data collection, and related case management activities of teachers and related services personnel providing services described in the IEP of children with disabilities, that is needed for the implementation of those case management activities." INDIANA STATE BOARD OF ACCOUNTS 41 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 34 CFR 300.800 states: "The Secretary provides grants under section 619 of the Act to assist States to provide special education and related services in accordance with Part B of the Act ? (a) To children with disabilities aged three through five years; and (b) At a State's discretion, to two-year-old children with disabilities who will turn three during the school year." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . (g) Be adequately documented. . . ." 2 CFR 200.77 (Uniform Guidance) states: "Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. The Federal awarding agency or pass-through entity must include start and end dates of the period of performance in the Federal award (see ?? 200.210 Information contained in a Federal award paragraph (a)(5) and 200.331 Requirements for pass-through entities, paragraph (a)(1)(iv))." 2 CFR 200.1 (Revised Uniform Guidance) states in part: ". . . Period of performance means the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Identification of the period of performance in the Federal award per ? 200.211(b)(5) does not commit the awarding agency to fund the award beyond the currently approved budget period. . . ." 2 CFR 200.309 (Uniform Guidance) states: "A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity." 2CFR 200.309 (Revised Uniform Guidance) states: "If a Federal awarding agency or pass-through entity approves an extension, or if a recipient extends under ? 200.308(e)(2), the Period of Performance will be amended to end at the completion of the extension. If a termination occurs, the Period of Performance will be amended to end upon the effective date of termination. If a renewal award is issued, a distinct Period of Performance will begin." INDIANA STATE BOARD OF ACCOUNTS 42 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, related to the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with compliance requirements listed above. Questioned Costs Known questioned costs of $1,173,864 were identified, as detailed in Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure documentation will be maintained and made available for audit and comply with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-010 Subject: Special Education Cluster (IDEA) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-138-PN01, 21619-138-PN01, 22611-138-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. The School Corporation had not established an effective system of internal controls to ensure that proper documentation was retained for audit. The School Corporation was unable to provide supporting documentation for one of the two journal entries tested. For the one journal entry, we were unable to determine if the Special Education fund transfers in, totaling $619,180, and transfers out, totaling $554,684, were for allowable activities and costs for the program. In addition, we were unable to determine if the transfers were for transactions that occurred within the period of performance. The lack of internal controls and the failure to retain supporting documentation was isolated to the transfers noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 40 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 300.202(a) states: "General. Amounts provided to the LEA under Part B of the Act - (1) Must be expended in accordance with the applicable provisions of this part; (2) Must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with paragraph (b) of this section; and (3) Must be used to supplement State, local, and other Federal funds and not to supplant those funds." 34 CFR 300.208 states: "(a) Uses. Notwithstanding ?? 300.202, 300.203(b), and 300.162(b), funds provided to an LEA under Part B of the Act may be used for the following activities: (1) Services and aids that also benefit nondisabled children. For the costs of special education and related services, and supplementary aids and services, provided in a regular class or other education-related setting to a child with a disability in accordance with the IEP of the child, even if one or more nondisabled children benefit from these services. (2) Early intervening services. To develop and implement coordinated, early intervening educational services in accordance with ? 300.226. (3) High cost special education and related services. To establish and implement cost or risk sharing funds, consortia, or cooperatives for the LEA itself, or for LEAs working in a consortium of which the LEA is a part, to pay for high cost special education and related services. (b) Administrative case management. An LEA may use funds received under Part B of the Act to purchase appropriate technology for recordkeeping, data collection, and related case management activities of teachers and related services personnel providing services described in the IEP of children with disabilities, that is needed for the implementation of those case management activities." INDIANA STATE BOARD OF ACCOUNTS 41 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 34 CFR 300.800 states: "The Secretary provides grants under section 619 of the Act to assist States to provide special education and related services in accordance with Part B of the Act ? (a) To children with disabilities aged three through five years; and (b) At a State's discretion, to two-year-old children with disabilities who will turn three during the school year." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . (g) Be adequately documented. . . ." 2 CFR 200.77 (Uniform Guidance) states: "Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. The Federal awarding agency or pass-through entity must include start and end dates of the period of performance in the Federal award (see ?? 200.210 Information contained in a Federal award paragraph (a)(5) and 200.331 Requirements for pass-through entities, paragraph (a)(1)(iv))." 2 CFR 200.1 (Revised Uniform Guidance) states in part: ". . . Period of performance means the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Identification of the period of performance in the Federal award per ? 200.211(b)(5) does not commit the awarding agency to fund the award beyond the currently approved budget period. . . ." 2 CFR 200.309 (Uniform Guidance) states: "A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity." 2CFR 200.309 (Revised Uniform Guidance) states: "If a Federal awarding agency or pass-through entity approves an extension, or if a recipient extends under ? 200.308(e)(2), the Period of Performance will be amended to end at the completion of the extension. If a termination occurs, the Period of Performance will be amended to end upon the effective date of termination. If a renewal award is issued, a distinct Period of Performance will begin." INDIANA STATE BOARD OF ACCOUNTS 42 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, related to the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with compliance requirements listed above. Questioned Costs Known questioned costs of $1,173,864 were identified, as detailed in Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure documentation will be maintained and made available for audit and comply with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-010 Subject: Special Education Cluster (IDEA) - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-138-PN01, 21619-138-PN01, 22611-138-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. The School Corporation had not established an effective system of internal controls to ensure that proper documentation was retained for audit. The School Corporation was unable to provide supporting documentation for one of the two journal entries tested. For the one journal entry, we were unable to determine if the Special Education fund transfers in, totaling $619,180, and transfers out, totaling $554,684, were for allowable activities and costs for the program. In addition, we were unable to determine if the transfers were for transactions that occurred within the period of performance. The lack of internal controls and the failure to retain supporting documentation was isolated to the transfers noted above. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 40 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.333 (Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 2 CFR 200.334 (Revised Uniform Guidance) states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 34 CFR 300.202(a) states: "General. Amounts provided to the LEA under Part B of the Act - (1) Must be expended in accordance with the applicable provisions of this part; (2) Must be used only to pay the excess costs of providing special education and related services to children with disabilities, consistent with paragraph (b) of this section; and (3) Must be used to supplement State, local, and other Federal funds and not to supplant those funds." 34 CFR 300.208 states: "(a) Uses. Notwithstanding ?? 300.202, 300.203(b), and 300.162(b), funds provided to an LEA under Part B of the Act may be used for the following activities: (1) Services and aids that also benefit nondisabled children. For the costs of special education and related services, and supplementary aids and services, provided in a regular class or other education-related setting to a child with a disability in accordance with the IEP of the child, even if one or more nondisabled children benefit from these services. (2) Early intervening services. To develop and implement coordinated, early intervening educational services in accordance with ? 300.226. (3) High cost special education and related services. To establish and implement cost or risk sharing funds, consortia, or cooperatives for the LEA itself, or for LEAs working in a consortium of which the LEA is a part, to pay for high cost special education and related services. (b) Administrative case management. An LEA may use funds received under Part B of the Act to purchase appropriate technology for recordkeeping, data collection, and related case management activities of teachers and related services personnel providing services described in the IEP of children with disabilities, that is needed for the implementation of those case management activities." INDIANA STATE BOARD OF ACCOUNTS 41 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 34 CFR 300.800 states: "The Secretary provides grants under section 619 of the Act to assist States to provide special education and related services in accordance with Part B of the Act ? (a) To children with disabilities aged three through five years; and (b) At a State's discretion, to two-year-old children with disabilities who will turn three during the school year." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . (g) Be adequately documented. . . ." 2 CFR 200.77 (Uniform Guidance) states: "Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. The Federal awarding agency or pass-through entity must include start and end dates of the period of performance in the Federal award (see ?? 200.210 Information contained in a Federal award paragraph (a)(5) and 200.331 Requirements for pass-through entities, paragraph (a)(1)(iv))." 2 CFR 200.1 (Revised Uniform Guidance) states in part: ". . . Period of performance means the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Identification of the period of performance in the Federal award per ? 200.211(b)(5) does not commit the awarding agency to fund the award beyond the currently approved budget period. . . ." 2 CFR 200.309 (Uniform Guidance) states: "A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity." 2CFR 200.309 (Revised Uniform Guidance) states: "If a Federal awarding agency or pass-through entity approves an extension, or if a recipient extends under ? 200.308(e)(2), the Period of Performance will be amended to end at the completion of the extension. If a termination occurs, the Period of Performance will be amended to end upon the effective date of termination. If a renewal award is issued, a distinct Period of Performance will begin." INDIANA STATE BOARD OF ACCOUNTS 42 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed nor implemented a system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, related to the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with compliance requirements listed above. Questioned Costs Known questioned costs of $1,173,864 were identified, as detailed in Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure documentation will be maintained and made available for audit and comply with the grant agreement and the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Period of Performance compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria or specific requirement: According to ? 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: ? 93.958 o The Organization began allocating direct salaries, fringe, and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries, fringe and indirect expenditures allocated to the grant prior to the period of performance was approximately $50,701. ? 93.243 o The Organization began allocating direct salaries, fringe, and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries, fringe and indirect expenditures allocated to the grant prior to the period of performance was approximately $5,233. Questioned costs: None. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: No. Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. As the previous process for grant salary, fringe, and indirect billings was based on salary paid date this resulted in expenses on certain grants being allocated prior to the period of performance. While this was at least in part offset by eligible grant expenses not being billed at the end of the grant period, it was not in compliance with 2 CFR 200.1 for period of performance. The CFO, supported by the Controller and Grants Manager, will immediately update the controls and grants billing processes to be based on incurred date rather than paid date.
Criteria or specific requirement: According to ? 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: ? 93.958 o The Organization began allocating direct salaries, fringe, and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries, fringe and indirect expenditures allocated to the grant prior to the period of performance was approximately $50,701. ? 93.243 o The Organization began allocating direct salaries, fringe, and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries, fringe and indirect expenditures allocated to the grant prior to the period of performance was approximately $5,233. Questioned costs: None. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: No. Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. As the previous process for grant salary, fringe, and indirect billings was based on salary paid date this resulted in expenses on certain grants being allocated prior to the period of performance. While this was at least in part offset by eligible grant expenses not being billed at the end of the grant period, it was not in compliance with 2 CFR 200.1 for period of performance. The CFO, supported by the Controller and Grants Manager, will immediately update the controls and grants billing processes to be based on incurred date rather than paid date.
Criteria or specific requirement: According to ? 2 CFR 200.303, Internal Controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: ? 93.958 o The Organization began allocating direct salaries, fringe, and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries, fringe and indirect expenditures allocated to the grant prior to the period of performance was approximately $50,701. ? 93.243 o The Organization began allocating direct salaries, fringe, and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries, fringe and indirect expenditures allocated to the grant prior to the period of performance was approximately $5,233. Questioned costs: None. Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period. Effect: Noncompliance with federal regulations. Repeat Finding: No. Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date. Views of responsible officials: Management concurs with the audit finding. As the previous process for grant salary, fringe, and indirect billings was based on salary paid date this resulted in expenses on certain grants being allocated prior to the period of performance. While this was at least in part offset by eligible grant expenses not being billed at the end of the grant period, it was not in compliance with 2 CFR 200.1 for period of performance. The CFO, supported by the Controller and Grants Manager, will immediately update the controls and grants billing processes to be based on incurred date rather than paid date.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-071 Federal Funding Accountability and Transparency Act The Department is responsible for administering two programs as part of the Employment Service Cluster: Employment Service/Wagner Peyser Funded Activities (Wagner) [ALN 17.207], and Jobs for Veterans State Grant (JSVG) [ALN 17.801]. The main overall purpose of these programs is to improve the functioning of the nation's labor markets by bringing together individuals who are seeking employment and employers who are seeking workers. The Wagner program provides a variety of services to job seekers, including career services and job search assistances; in addition, employers can access the program to post job orders and obtain qualified applicants. The JSVG provides federal funding through a formula grant to State Workforce Agencies (SWAs), including the Department, to hire dedicated staff to provide individualized career and training-related service to veterans and eligible individuals with significant barriers to employment, and to assist employers in filling their workforce needs with job-seeking veterans. The Department administers the programs and also passes Employment Service Cluster funds through to Colorado counties so they can help provide these services to individuals. The Department is required to comply with the Federal Funding Accountability and Transparency Act of 2006 (Transparency Act or FFATA) for both programs within the Employment Service Cluster. The Transparency Act was created to empower Americans with the ability to hold the government accountable for each spending decision and, as a result, to reduce wasteful spending by the government. The Transparency Act requires the federal government to make certain information on federal awards available to the public. In accordance with the Transparency Act, the Department is required to report information about subgrants, or subawards, given to other governments or to nonprofit organizations, also referred to as subrecipients. Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the Department, to an entity to carry out part of a Federal grant award received by the pass-through entity. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? In Fiscal Year 2022, the Department made 11 subawards to 10 Colorado counties (subrecipients) for the Employment Service Cluster, $11.2 million in subawards to 10 counties for Wagner, and $45,116 in subawards to one county for JVSG, totaling $11.3 million. The Department is required to submit FFATA information through the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Once the Department submits a report to FSRS, the public can view information from the report, including the subrecipient?s name, subaward identification number, subaward obligation/action date, subaward amount, federal awarding agency and subagency, the Department?s name, and the Department?s grant award identification number. What was the purpose of our audit work and what work was performed? The purpose of our audit work was to determine whether the Department had adequate internal controls over and complied with FFATA reporting requirements for the Employment Service Cluster programs during Fiscal Year 2022. As part of our audit work, we requested the Department?s policies and procedures over FFATA reporting, the FFATA reports submitted by the Department in Fiscal Year 2022, and a list of all subawards made by the Department during Fiscal Year 2022. How were the results of the audit work measured? In accordance with federal regulations [2 CFR 170.330.l(a)], the Department is required to report subawards of $30,000 or more to FSRS by the end of the month following the month in which the award was made. For example, the Department would have to submit a FFATA report to FSRS in May 2022 if an award or supplemental award equal to or greater than $30,000 was made in April 2022. What problem did the audit work identify? Based on our audit work, we determined that the Department did not comply with FFATA reporting requirements for the Employment Cluster and did not report any subawards in FSRS for Fiscal Year 2022. Specifically, we determined that the Department did not report $11.21 million in subawards to 10 subrecipients (the counties) for Wagner, and $45,116 in subawards to one county for JVSG. The following tables summarize the results of our testing and groups each exception within the following categories: subaward not reported, report not timely, subaward amount incorrect, and subaward missing key elements. See Schedule of Findings and Questioned Costs for chart/table See Schedule of Findings and Questioned Costs for footnote Why did this problem occur? The Department was not aware of the FFATA reporting requirement because it did not review the federal grant agreements to determine that the requirement was applicable for the program. Why does this problem matter? By failing to properly report subawards to FSRS, the Department is out of compliance with federal reporting requirements and risks federal sanctions. In addition, it fails to meet the federal intent of transparency for federal program spending. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-071 The Department of Labor and Employment should implement appropriate internal controls and related processes, such as detailed reviews of federal grant agreements, over the Employment Service Cluster to ensure that it is aware of, and in compliance with all federal reporting requirements, including requirements under the Federal Funding Accountability and Transparency Act of 2006. Response Department of Labor and Employment Agree Implementation Date: February 2023 By the implementation date, the Department of Labor and Employment (CDLE) will complete a review of grant agreements for reporting requirements, including the Federal Funding Accountability and Transparency Act of 2006. By the implementation date, the CDLE will develop and implement appropriate controls and processes to come into compliance with the reporting requirements and submit FFATA reports for the 10 entities identified in the audit.
Finding 2022-071 Federal Funding Accountability and Transparency Act The Department is responsible for administering two programs as part of the Employment Service Cluster: Employment Service/Wagner Peyser Funded Activities (Wagner) [ALN 17.207], and Jobs for Veterans State Grant (JSVG) [ALN 17.801]. The main overall purpose of these programs is to improve the functioning of the nation's labor markets by bringing together individuals who are seeking employment and employers who are seeking workers. The Wagner program provides a variety of services to job seekers, including career services and job search assistances; in addition, employers can access the program to post job orders and obtain qualified applicants. The JSVG provides federal funding through a formula grant to State Workforce Agencies (SWAs), including the Department, to hire dedicated staff to provide individualized career and training-related service to veterans and eligible individuals with significant barriers to employment, and to assist employers in filling their workforce needs with job-seeking veterans. The Department administers the programs and also passes Employment Service Cluster funds through to Colorado counties so they can help provide these services to individuals. The Department is required to comply with the Federal Funding Accountability and Transparency Act of 2006 (Transparency Act or FFATA) for both programs within the Employment Service Cluster. The Transparency Act was created to empower Americans with the ability to hold the government accountable for each spending decision and, as a result, to reduce wasteful spending by the government. The Transparency Act requires the federal government to make certain information on federal awards available to the public. In accordance with the Transparency Act, the Department is required to report information about subgrants, or subawards, given to other governments or to nonprofit organizations, also referred to as subrecipients. Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the Department, to an entity to carry out part of a Federal grant award received by the pass-through entity. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? In Fiscal Year 2022, the Department made 11 subawards to 10 Colorado counties (subrecipients) for the Employment Service Cluster, $11.2 million in subawards to 10 counties for Wagner, and $45,116 in subawards to one county for JVSG, totaling $11.3 million. The Department is required to submit FFATA information through the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Once the Department submits a report to FSRS, the public can view information from the report, including the subrecipient?s name, subaward identification number, subaward obligation/action date, subaward amount, federal awarding agency and subagency, the Department?s name, and the Department?s grant award identification number. What was the purpose of our audit work and what work was performed? The purpose of our audit work was to determine whether the Department had adequate internal controls over and complied with FFATA reporting requirements for the Employment Service Cluster programs during Fiscal Year 2022. As part of our audit work, we requested the Department?s policies and procedures over FFATA reporting, the FFATA reports submitted by the Department in Fiscal Year 2022, and a list of all subawards made by the Department during Fiscal Year 2022. How were the results of the audit work measured? In accordance with federal regulations [2 CFR 170.330.l(a)], the Department is required to report subawards of $30,000 or more to FSRS by the end of the month following the month in which the award was made. For example, the Department would have to submit a FFATA report to FSRS in May 2022 if an award or supplemental award equal to or greater than $30,000 was made in April 2022. What problem did the audit work identify? Based on our audit work, we determined that the Department did not comply with FFATA reporting requirements for the Employment Cluster and did not report any subawards in FSRS for Fiscal Year 2022. Specifically, we determined that the Department did not report $11.21 million in subawards to 10 subrecipients (the counties) for Wagner, and $45,116 in subawards to one county for JVSG. The following tables summarize the results of our testing and groups each exception within the following categories: subaward not reported, report not timely, subaward amount incorrect, and subaward missing key elements. See Schedule of Findings and Questioned Costs for chart/table See Schedule of Findings and Questioned Costs for footnote Why did this problem occur? The Department was not aware of the FFATA reporting requirement because it did not review the federal grant agreements to determine that the requirement was applicable for the program. Why does this problem matter? By failing to properly report subawards to FSRS, the Department is out of compliance with federal reporting requirements and risks federal sanctions. In addition, it fails to meet the federal intent of transparency for federal program spending. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-071 The Department of Labor and Employment should implement appropriate internal controls and related processes, such as detailed reviews of federal grant agreements, over the Employment Service Cluster to ensure that it is aware of, and in compliance with all federal reporting requirements, including requirements under the Federal Funding Accountability and Transparency Act of 2006. Response Department of Labor and Employment Agree Implementation Date: February 2023 By the implementation date, the Department of Labor and Employment (CDLE) will complete a review of grant agreements for reporting requirements, including the Federal Funding Accountability and Transparency Act of 2006. By the implementation date, the CDLE will develop and implement appropriate controls and processes to come into compliance with the reporting requirements and submit FFATA reports for the 10 entities identified in the audit.
Finding 2022-071 Federal Funding Accountability and Transparency Act The Department is responsible for administering two programs as part of the Employment Service Cluster: Employment Service/Wagner Peyser Funded Activities (Wagner) [ALN 17.207], and Jobs for Veterans State Grant (JSVG) [ALN 17.801]. The main overall purpose of these programs is to improve the functioning of the nation's labor markets by bringing together individuals who are seeking employment and employers who are seeking workers. The Wagner program provides a variety of services to job seekers, including career services and job search assistances; in addition, employers can access the program to post job orders and obtain qualified applicants. The JSVG provides federal funding through a formula grant to State Workforce Agencies (SWAs), including the Department, to hire dedicated staff to provide individualized career and training-related service to veterans and eligible individuals with significant barriers to employment, and to assist employers in filling their workforce needs with job-seeking veterans. The Department administers the programs and also passes Employment Service Cluster funds through to Colorado counties so they can help provide these services to individuals. The Department is required to comply with the Federal Funding Accountability and Transparency Act of 2006 (Transparency Act or FFATA) for both programs within the Employment Service Cluster. The Transparency Act was created to empower Americans with the ability to hold the government accountable for each spending decision and, as a result, to reduce wasteful spending by the government. The Transparency Act requires the federal government to make certain information on federal awards available to the public. In accordance with the Transparency Act, the Department is required to report information about subgrants, or subawards, given to other governments or to nonprofit organizations, also referred to as subrecipients. Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the Department, to an entity to carry out part of a Federal grant award received by the pass-through entity. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? In Fiscal Year 2022, the Department made 11 subawards to 10 Colorado counties (subrecipients) for the Employment Service Cluster, $11.2 million in subawards to 10 counties for Wagner, and $45,116 in subawards to one county for JVSG, totaling $11.3 million. The Department is required to submit FFATA information through the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Once the Department submits a report to FSRS, the public can view information from the report, including the subrecipient?s name, subaward identification number, subaward obligation/action date, subaward amount, federal awarding agency and subagency, the Department?s name, and the Department?s grant award identification number. What was the purpose of our audit work and what work was performed? The purpose of our audit work was to determine whether the Department had adequate internal controls over and complied with FFATA reporting requirements for the Employment Service Cluster programs during Fiscal Year 2022. As part of our audit work, we requested the Department?s policies and procedures over FFATA reporting, the FFATA reports submitted by the Department in Fiscal Year 2022, and a list of all subawards made by the Department during Fiscal Year 2022. How were the results of the audit work measured? In accordance with federal regulations [2 CFR 170.330.l(a)], the Department is required to report subawards of $30,000 or more to FSRS by the end of the month following the month in which the award was made. For example, the Department would have to submit a FFATA report to FSRS in May 2022 if an award or supplemental award equal to or greater than $30,000 was made in April 2022. What problem did the audit work identify? Based on our audit work, we determined that the Department did not comply with FFATA reporting requirements for the Employment Cluster and did not report any subawards in FSRS for Fiscal Year 2022. Specifically, we determined that the Department did not report $11.21 million in subawards to 10 subrecipients (the counties) for Wagner, and $45,116 in subawards to one county for JVSG. The following tables summarize the results of our testing and groups each exception within the following categories: subaward not reported, report not timely, subaward amount incorrect, and subaward missing key elements. See Schedule of Findings and Questioned Costs for chart/table See Schedule of Findings and Questioned Costs for footnote Why did this problem occur? The Department was not aware of the FFATA reporting requirement because it did not review the federal grant agreements to determine that the requirement was applicable for the program. Why does this problem matter? By failing to properly report subawards to FSRS, the Department is out of compliance with federal reporting requirements and risks federal sanctions. In addition, it fails to meet the federal intent of transparency for federal program spending. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-071 The Department of Labor and Employment should implement appropriate internal controls and related processes, such as detailed reviews of federal grant agreements, over the Employment Service Cluster to ensure that it is aware of, and in compliance with all federal reporting requirements, including requirements under the Federal Funding Accountability and Transparency Act of 2006. Response Department of Labor and Employment Agree Implementation Date: February 2023 By the implementation date, the Department of Labor and Employment (CDLE) will complete a review of grant agreements for reporting requirements, including the Federal Funding Accountability and Transparency Act of 2006. By the implementation date, the CDLE will develop and implement appropriate controls and processes to come into compliance with the reporting requirements and submit FFATA reports for the 10 entities identified in the audit.
Finding 2022-071 Federal Funding Accountability and Transparency Act The Department is responsible for administering two programs as part of the Employment Service Cluster: Employment Service/Wagner Peyser Funded Activities (Wagner) [ALN 17.207], and Jobs for Veterans State Grant (JSVG) [ALN 17.801]. The main overall purpose of these programs is to improve the functioning of the nation's labor markets by bringing together individuals who are seeking employment and employers who are seeking workers. The Wagner program provides a variety of services to job seekers, including career services and job search assistances; in addition, employers can access the program to post job orders and obtain qualified applicants. The JSVG provides federal funding through a formula grant to State Workforce Agencies (SWAs), including the Department, to hire dedicated staff to provide individualized career and training-related service to veterans and eligible individuals with significant barriers to employment, and to assist employers in filling their workforce needs with job-seeking veterans. The Department administers the programs and also passes Employment Service Cluster funds through to Colorado counties so they can help provide these services to individuals. The Department is required to comply with the Federal Funding Accountability and Transparency Act of 2006 (Transparency Act or FFATA) for both programs within the Employment Service Cluster. The Transparency Act was created to empower Americans with the ability to hold the government accountable for each spending decision and, as a result, to reduce wasteful spending by the government. The Transparency Act requires the federal government to make certain information on federal awards available to the public. In accordance with the Transparency Act, the Department is required to report information about subgrants, or subawards, given to other governments or to nonprofit organizations, also referred to as subrecipients. Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the Department, to an entity to carry out part of a Federal grant award received by the pass-through entity. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? In Fiscal Year 2022, the Department made 11 subawards to 10 Colorado counties (subrecipients) for the Employment Service Cluster, $11.2 million in subawards to 10 counties for Wagner, and $45,116 in subawards to one county for JVSG, totaling $11.3 million. The Department is required to submit FFATA information through the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Once the Department submits a report to FSRS, the public can view information from the report, including the subrecipient?s name, subaward identification number, subaward obligation/action date, subaward amount, federal awarding agency and subagency, the Department?s name, and the Department?s grant award identification number. What was the purpose of our audit work and what work was performed? The purpose of our audit work was to determine whether the Department had adequate internal controls over and complied with FFATA reporting requirements for the Employment Service Cluster programs during Fiscal Year 2022. As part of our audit work, we requested the Department?s policies and procedures over FFATA reporting, the FFATA reports submitted by the Department in Fiscal Year 2022, and a list of all subawards made by the Department during Fiscal Year 2022. How were the results of the audit work measured? In accordance with federal regulations [2 CFR 170.330.l(a)], the Department is required to report subawards of $30,000 or more to FSRS by the end of the month following the month in which the award was made. For example, the Department would have to submit a FFATA report to FSRS in May 2022 if an award or supplemental award equal to or greater than $30,000 was made in April 2022. What problem did the audit work identify? Based on our audit work, we determined that the Department did not comply with FFATA reporting requirements for the Employment Cluster and did not report any subawards in FSRS for Fiscal Year 2022. Specifically, we determined that the Department did not report $11.21 million in subawards to 10 subrecipients (the counties) for Wagner, and $45,116 in subawards to one county for JVSG. The following tables summarize the results of our testing and groups each exception within the following categories: subaward not reported, report not timely, subaward amount incorrect, and subaward missing key elements. See Schedule of Findings and Questioned Costs for chart/table See Schedule of Findings and Questioned Costs for footnote Why did this problem occur? The Department was not aware of the FFATA reporting requirement because it did not review the federal grant agreements to determine that the requirement was applicable for the program. Why does this problem matter? By failing to properly report subawards to FSRS, the Department is out of compliance with federal reporting requirements and risks federal sanctions. In addition, it fails to meet the federal intent of transparency for federal program spending. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-071 The Department of Labor and Employment should implement appropriate internal controls and related processes, such as detailed reviews of federal grant agreements, over the Employment Service Cluster to ensure that it is aware of, and in compliance with all federal reporting requirements, including requirements under the Federal Funding Accountability and Transparency Act of 2006. Response Department of Labor and Employment Agree Implementation Date: February 2023 By the implementation date, the Department of Labor and Employment (CDLE) will complete a review of grant agreements for reporting requirements, including the Federal Funding Accountability and Transparency Act of 2006. By the implementation date, the CDLE will develop and implement appropriate controls and processes to come into compliance with the reporting requirements and submit FFATA reports for the 10 entities identified in the audit.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.
Finding 2022-066 Research and Development Cluster Subrecipient Monitoring Compliance Requirement The federal government sponsors research and development (R&D) activities under a variety of types of awards, most commonly grants, cooperative agreements, and contracts, to achieve objectives agreed upon between the federal awarding agency and the non-federal entity. The types of R&D conducted under these awards vary greatly. The objective of an individual project is explained in the federal award letter. R&D activities at the University are subject to federal subrecipient monitoring requirements. Under these requirements, the University is required to monitor its subrecipients to ensure they use funds in accordance with applicable laws, regulations and terms of the award. A subrecipient is defined in federal regulations [2 CFR 200.1] as ?an entity, usually but not limited to non-Federal entities, that receives a subaward from a pass-through entity to carry out part of a federal award; but does not include an individual that is a beneficiary of such award. A subrecipient may also be a recipient of other Federal awards directly from a federal awarding agency.? Federal regulations [2 CFR 200.1] define a subaward as an award provided by a pass-through entity, in this case the University, to an entity to carry out part of a Federal grant award received by the pass-through entity. As part of its subrecipient monitoring process, the University uses a subrecipient monitoring checklist that includes a variety of checkpoints, including whether an approved budget is in place and reviewed: whether the subrecipient had an audit, if applicable, and whether that audit has been reviewed; and whether a risk assessment related to a subrecipient?s potential noncompliance has been performed. During Fiscal Year 2022, the University?s three campuses in total expended approximately $916 million in R&D grant funds: $504 million, $406 million, and $6 million from the Boulder, Denver, and UCCS campuses, respectively. The University passed approximately $120 million to 1,325 subrecipients including other universities and non-profit organizations, to assist in the performance of a wide-range of projects such as research into learning disabilities or the advancement of scientific discovery, or other research related projects. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the University?s campuses had adequate internal controls in place over, and complied with, the R&D?s subrecipient monitoring requirements for Fiscal Year 2022. As part of our audit work, we tested 40 subrecipients to determine whether the University campuses? performed the subrecipient risk assessments related to a subrecipient?s potential noncompliance as required by federal regulations. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation 2 CFR 200.331(b) requires that the University?s campuses, as federal grant recipients, must ?evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.? ? The Boulder campus? policy states that monitoring the subaward is a ?collaborative effort? made in both Central Administration as well as in the departments through the Principal Investigator and their supporting Department Administrator.? Completion of a risk analysis and the subrecipient monitoring checklist is listed among the responsibilities of the Central Office. What problem did the audit work identify? The Boulder campus did not perform a risk assessment for six out of the 40 subrecipients we tested (15 percent). However, the campus did perform other monitoring procedures over these subrecipients as the risk assessment process is one procedure in the overall subrecipient monitoring process. Why did this problem occur? The University did not have adequate internal controls in place for monitoring its subrecipients. Specifically, the University?s Boulder campus did not ensure that staff reviewed the subrecipient monitoring checklist in all instances to ensure all appropriate steps were completed, including risk assessments. University personnel indicated that proper staffing was not in place and specific monitoring of risk assessments was not being performed. Why does this problem matter? The University is obligated to adhere to specified requirements as outlined in federal regulations and the respective award agreement. By failing to adhere to the requirements for subrecipient monitoring, the University risks performing inadequate or inappropriate monitoring procedures and thereby increases the risk of subawards being used for unauthorized purposes. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-066 The University of Colorado?s Boulder campus should strengthen its internal controls over, and ensure compliance with, federal subrecipient monitoring requirements for the Research and Development Cluster grant programs by enforcing required reviews of the subrecipient checklist for completeness to ensure all of the appropriate steps are completed, including risk assessments, and by ensuring that appropriate levels of staff are assigned responsibility for the reviews. Response University of Colorado Agree Implementation Date: November 2022 Management agrees with the recommendation. Due to hiring of new staff and an internal audit with similar findings, these actions were in process and implemented as of November 2022. These actions are part of the Sub Team?s standard operating processes and will continue. The proposed corrective action plan is as follows: ? The hiring of new team members in 2022; all team members trained on subcontracting processes and documentation requirements with an emphasis on following standard baseline procedures. ? New Subcontract Administrator (SCA) position tasked with compiling final packets for each sub, which includes a quality check to ensure all documents and signatures required are included. ? Use of subcontract checklist and risk assessments required and consistently done by the team.