2024-003 U.S. Department of Treasury, Federal Financial Assistance Listing #21.027, COVID-19 – Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.2096 outlines the requirements the non-federal entity verify vendors for which it plans to enter into a covered transaction are not debarred, suspended, or otherwise excluded. Condition: We noted that while the County does have a purchasing policy, elements as required by Uniform Guidance are absent from the policy. In addition, we noted the County did not retain the supporting documentation indicating they had verified vendors they were entering into covered transactions with were neither suspended nor debarred. Cause: The County had not had single audits performed until recently as a result of the increase in funding due to the COVID‐19 pandemic. Because of this, they had not updated their purchasing policy to be in compliance with Uniform Guidance. This also impacted the County’s purchasing and procurement checklist for updating it to including retaining the support the County verified vendors were neither suspended nor debarred in the contract’s procurement file. Effect: While our testing noted no instances of noncompliance, the absence of internal controls over compliance as it relates to having a Uniform Guidance compliant policy, could lead the County to enter into covered transactions that are not compliant with federal regulations. Questioned Costs: None reported. Context/Sampling: Sampling was not used to test the policy. Repeat Finding from Prior Year(s): No Recommendation: The County should review the applicable provisions of the CFR to ensure their written procurement policy is compliant with Uniform Guidance requirements. Additionally, the County should review their checklist and/or document retention requirements for contracts to be sure it includes the support the County verified the vendor was neither suspended nor debarred. Views of Responsible Officials: Management agrees with the finding.
Finding The U. S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, or renovation of public buildings in excess of $100,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. The Autauga County Board of Education (the “Board”) entered into two public works contracts in fiscal year 2024 for the purchase and installation of network equipment totaling $171,824.78 and for the purchase and installation of network switches, wireless access points and digital signage totaling $199,292.13 of which $321,490.07 of COVID-19 Education Stabilization Funds were expended during the audit period. The Board did not bid the projects. Instead, the Board utilized purchasing cooperative contracts which are not allowed under the Public Works Law. As a result, the Board did not comply with the Uniform Guidance procurement requirements for these purchases. Recommendation The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and the Code of Alabama 1975, Title 39.
Finding The U. S. Code of Federal Regulations Title 2, Part 200.318, of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that non-Federal entities must have and use its own documented procurement procedures which reflect State and local laws and regulations provided that the procurements conform to applicable Federal law and the standards identified within that section. The Code of Alabama 1975, Title 39, which is a State law, requires the construction, installation, repair, or renovation of public buildings in excess of $100,000.00 that are paid, in whole or part, with public funds to be bid under the provisions of the Public Works Law. The Autauga County Board of Education (the “Board”) entered into two public works contracts in fiscal year 2024 for the purchase and installation of network equipment totaling $171,824.78 and for the purchase and installation of network switches, wireless access points and digital signage totaling $199,292.13 of which $321,490.07 of COVID-19 Education Stabilization Funds were expended during the audit period. The Board did not bid the projects. Instead, the Board utilized purchasing cooperative contracts which are not allowed under the Public Works Law. As a result, the Board did not comply with the Uniform Guidance procurement requirements for these purchases. Recommendation The Board should ensure compliance with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 2 CFR 200.318 and the Code of Alabama 1975, Title 39.
Criteria: 2 CFR Section 200.318 requires that 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 standard identified in §§ 200.317 through 200.327 and must be adhered to. Condition and context: During testing of the Alliance’s controls on compliance over procurement and suspension and debarment, we identified the Alliance did not have all the needed documentation around the suspension and debarment check. Cause: Controls and processes were not effectively designed to ensure there was all proper documentation around the suspension and debarment check. Effect: The Alliance was not fully in compliance with the procurement and suspension and debarment check requirements of the Uniform Guidance. Questioned Costs: None. Identification as a Repeat Finding: N/A. Recommendation: We recommend that the Alliance review its current processes and controls over procurement and suspension and debarment to ensure all required documentation is retained and available. Views of Responsible Official: Management agrees with the finding. See Corrective Action Plan.
2024-001 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Program Information Funding Agency: U.S. Department of the Treasury Federal ALN: 21.027 Criteria Per 2 CFR 200.214, non-federal entities are prohibited from contracting with parties that are suspended or debarred. 2 CFR 200.318(i) also states that "subrecipients must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price." Condition The Chamber has a procurement policy in place; however, the Chamber neglected to verify if vendors had been suspended or debarred, in accordance with stated regulations. The Chamber also did not maintain sufficient records to document the rationale for the procurement method used for a transaction exceeding the small purchase threshold. Questioned Costs $25,000 Context A sample of 3 vendors was made from a population of 3 vendors whose expenses exceeded the covered transaction threshold that were charged to the major program. Of the 3 sampled vendors, the Chamber neglected to check the suspension or debarment status of 1 vendor prior to entering a covered transaction of $25,000. A sample of 3 vendors was made from a population of 3 vendors whose total transactions exceeded the small purchase threshold. Of the 3 sampled vendors, the Chamber did not maintain sufficient records to document the rationale of using a noncompetitive procurement method for a small purchase transaction. Cause The Chamber claimed that they had been conducting business transactions with this vendor prior to having a procurement policy in place and did not implement the procurement policy on already developed business relationships. The Chamber also did not consider documenting its rationale for continuing to use the vendor for services that exceeded the small purchase threshold that were charged to the major program. Effect Purchases may have occurred that do not follow the policy, and contracts with vendors that had been suspended or debarred could have been awarded and not detected. The Chamber also did not conduct procurement transaction "in a manner that provides full and open competition," as defined in 2 CFR 200.319(a). Repeat Finding Yes - reference 2023-001. Auditor's Recommendations Tacoma-Pierce County Chamber of Commerce should include a provision in all contracts transacted in conjunction with using funds originating from a federal award grant, with respect to suspension and debarment, communicate all requirements for procurement to staff and establish procedures to verify that vendors are not suspended or debarred. Chamber staff should also perform an independent status check of vendors in sam.gov prior to entering into an agreement and retain the search results. The Chamber should also evaluate its current method of procurement and educate staff that if using funds from a federal award to enter into a transaction exceeding the small purchase threshold, that full and open competition must be facilitated, despite any prior relationships with vendors.
Criteria or Specific Requirement: Per 2 CFR §200.318 - §200.326, non-federal entities must follow procurement procedures that ensure full and open competition and maintain proper documentation of procurement transactions. Additionally, under 2 CFR §200.213, entities must verify that vendors and subrecipients are not suspended or debarred before entering into contracts funded by federal awards. Condition: AIRA did not retain sufficient/updated documentation to support compliance with Uniform Guidance procurement standards. Specifically: • Procurement files lacked evidence of cost/price analysis and vendor selection criteria for purchases exceeding the micro-purchase threshold of $10,000. • The entity did not retain verification records confirming that selected vendors were not suspended or debarred in SAM.gov before contract execution. Cause: The deficiency appear to result from inadequate internal controls over procurement documentation and a lack of formalized procedures ensuring compliance with federal procurement and debarment requirements. Effect or Potential Effect: Failure to maintain proper procurement documentation and verify vendor eligibility increases the risk of noncompliance with federal requirements. This may lead to questioned costs and potential disallowance of federal expenditures. Questioned Costs: Not applicable as there were no questioned costs related to noncompliance. Recommendation: We recommend AIRA strengthen its internal controls over procurement documentation by considering the following: 1. Implementing a standardized procurement checklist to ensure all required documentation is maintained. A procurement checklist includes key compliance steps such as: a. Documentation of competitive procurement such as bids, proposals, or price comparisons. b. Justification for vendor selection, including cost/price analysis. c. Approval signatures from designated officials. d. Verification of vendor eligibility through SAM.gov before contract execution. 2. Establishing a formal review process to verify and document vendor eligibility through SAM.gov before awarding federally funded contracts. The entity should implement a procurement control process where a designated staff member completes the following steps: a. Searches SAM.gov for each vendor before contract execution. b. Prints and retains a copy of the vendor’s eligibility verification. c. Signs and dates a verification form certifying the check was performed. d. Includes this form in the procurement file. 3. Conducting regular training for staff involved in procurement to reinforce federal compliance requirements. The training should cover: a. Procurement methods (small purchase, micro-purchase, simplified acquisitions, competitive proposals, sealed bids, sole source) competitive proposals, sealed bids) b. Documentation requirements under 2 CFR Part 200. c. Vendor debarment checks and maintaining verification records. d. Retention requirements for procurement documents. Repeat finding from prior year: No Views of Responsible Officials: Management agrees with the finding. See attached corrective action plan.
Criteria or Specific Requirement: Per 2 CFR §200.318 - §200.326, non-federal entities must follow procurement procedures that ensure full and open competition and maintain proper documentation of procurement transactions. Additionally, under 2 CFR §200.213, entities must verify that vendors and subrecipients are not suspended or debarred before entering into contracts funded by federal awards. Condition: AIRA did not retain sufficient/updated documentation to support compliance with Uniform Guidance procurement standards. Specifically: • Procurement files lacked evidence of cost/price analysis and vendor selection criteria for purchases exceeding the micro-purchase threshold of $10,000. • The entity did not retain verification records confirming that selected vendors were not suspended or debarred in SAM.gov before contract execution. Cause: The deficiency appear to result from inadequate internal controls over procurement documentation and a lack of formalized procedures ensuring compliance with federal procurement and debarment requirements. Effect or Potential Effect: Failure to maintain proper procurement documentation and verify vendor eligibility increases the risk of noncompliance with federal requirements. This may lead to questioned costs and potential disallowance of federal expenditures. Questioned Costs: Not applicable as there were no questioned costs related to noncompliance. Recommendation: We recommend AIRA strengthen its internal controls over procurement documentation by considering the following: 1. Implementing a standardized procurement checklist to ensure all required documentation is maintained. A procurement checklist includes key compliance steps such as: a. Documentation of competitive procurement such as bids, proposals, or price comparisons. b. Justification for vendor selection, including cost/price analysis. c. Approval signatures from designated officials. d. Verification of vendor eligibility through SAM.gov before contract execution. 2. Establishing a formal review process to verify and document vendor eligibility through SAM.gov before awarding federally funded contracts. The entity should implement a procurement control process where a designated staff member completes the following steps: a. Searches SAM.gov for each vendor before contract execution. b. Prints and retains a copy of the vendor’s eligibility verification. c. Signs and dates a verification form certifying the check was performed. d. Includes this form in the procurement file. 3. Conducting regular training for staff involved in procurement to reinforce federal compliance requirements. The training should cover: a. Procurement methods (small purchase, micro-purchase, simplified acquisitions, competitive proposals, sealed bids, sole source) competitive proposals, sealed bids) b. Documentation requirements under 2 CFR Part 200. c. Vendor debarment checks and maintaining verification records. d. Retention requirements for procurement documents. Repeat finding from prior year: No Views of Responsible Officials: Management agrees with the finding. See attached corrective action plan.
Criteria or Specific Requirement: Per 2 CFR §200.318 - §200.326, non-federal entities must follow procurement procedures that ensure full and open competition and maintain proper documentation of procurement transactions. Additionally, under 2 CFR §200.213, entities must verify that vendors and subrecipients are not suspended or debarred before entering into contracts funded by federal awards. Condition: AIRA did not retain sufficient/updated documentation to support compliance with Uniform Guidance procurement standards. Specifically: • Procurement files lacked evidence of cost/price analysis and vendor selection criteria for purchases exceeding the micro-purchase threshold of $10,000. • The entity did not retain verification records confirming that selected vendors were not suspended or debarred in SAM.gov before contract execution. Cause: The deficiency appear to result from inadequate internal controls over procurement documentation and a lack of formalized procedures ensuring compliance with federal procurement and debarment requirements. Effect or Potential Effect: Failure to maintain proper procurement documentation and verify vendor eligibility increases the risk of noncompliance with federal requirements. This may lead to questioned costs and potential disallowance of federal expenditures. Questioned Costs: Not applicable as there were no questioned costs related to noncompliance. Recommendation: We recommend AIRA strengthen its internal controls over procurement documentation by considering the following: 1. Implementing a standardized procurement checklist to ensure all required documentation is maintained. A procurement checklist includes key compliance steps such as: a. Documentation of competitive procurement such as bids, proposals, or price comparisons. b. Justification for vendor selection, including cost/price analysis. c. Approval signatures from designated officials. d. Verification of vendor eligibility through SAM.gov before contract execution. 2. Establishing a formal review process to verify and document vendor eligibility through SAM.gov before awarding federally funded contracts. The entity should implement a procurement control process where a designated staff member completes the following steps: a. Searches SAM.gov for each vendor before contract execution. b. Prints and retains a copy of the vendor’s eligibility verification. c. Signs and dates a verification form certifying the check was performed. d. Includes this form in the procurement file. 3. Conducting regular training for staff involved in procurement to reinforce federal compliance requirements. The training should cover: a. Procurement methods (small purchase, micro-purchase, simplified acquisitions, competitive proposals, sealed bids, sole source) competitive proposals, sealed bids) b. Documentation requirements under 2 CFR Part 200. c. Vendor debarment checks and maintaining verification records. d. Retention requirements for procurement documents. Repeat finding from prior year: No Views of Responsible Officials: Management agrees with the finding. See attached corrective action plan.
2024-001: PROCUREMENT (repeat comment) Type: Considered a material weakness in internal control over compliance/noncompliance Program: ALN 93.969 Certified Community Behavioral Health Clinics (CCBHC) Expansion Grants Criteria: Per 2 CFR section 200.318, the non-Federal entity, “…must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327.” Condition: During testing, it was noted that the CMHSP had not followed procurement requirements for the contract entered into for project evaluation and coordination services. This is the same contract that produced a material finding in the prior year single audit. Cause/Effect: Management oversight. Questioned Cost: $150,000 – the amount paid during the fiscal year pursuant to contract in question. Recommendation: We recommend that the CMHSP review/update policies and procedures to ensure that all federal requirements for procurements are followed for future contracts entered into with federal funds. Management’s Resp: Management is in agreement with this recommendation. Also, the grantor was notified of this finding and has notified the CMHSP that there is no elevated level of risk moving forward through the remainder of the grant cycle.
Identification of the Federal Program - Coronavirus State and Local Fiscal Recovery Funds - Assistance Listing Number 21.027. Criteria - According to 2 CFR 200.318, recipients under a Federal award or subaward must maintain and use documented procedures for procurement transactions. These procedures must ensure full and open competition, proper oversight, and compliance with applicable regulations. The City’s procurement policy requires that all contracts exceeding $15,000 be subjected to competitive bidding and approved by the City Council before execution. This requirement ensures transparency, accountability, and proper oversight of public funds. Furthermore, the Code of Alabama § 11-43C-28 (2023) states that a record of the proceedings of every meeting of the council shall be kept, and every resolution or ordinance passed by the council must be recorded, and the record of the proceedings of the meeting shall, when approved by the council, be signed by the president of the council and the City Clerk. Condition - During the audit, a contract in the amount of $1,338,870 was identified that had undergone competitive bidding; however, there was no documentation in the City Council meeting minutes indicating that the contract had been approved by the City Council. It is unclear whether the City Council approved the contract, or if the approval was not properly documented. Cause - The is a lack of procedural oversight and inadequate documentation practices. Effect - Failure to obtain and/or document City Council approval for contracts over $15,000 increases the risk of unauthorized expenditures, potential noncompliance with procurement policies, and reduced transparency in financial decision making. This could also undermine public trust and limit oversight of municipal contracts. Additionally, noncompliance with 2 CFR 200.318 could place federal funding at risk or result in audit findings that require corrective action. Failure to follow record-keeping guidelines outlined in the Code of Alabama § 11-43C-28 (2023) further weakens transparency and accountability in municipal governance. Recommendation - The City should ensure that all contracts exceeding $15,000 are formally approved by the City Council and that such approvals are properly documented in the official meeting minutes. Additionally, the City should implement stronger controls to verify and maintain documentation of contract approvals to ensure compliance with both local procurement policies and federal regulations under 2 CFR 200.318. The City should also adhere to Code of Alabama § 11-43C-28 (2023) by maintaining complete and accurate records of City Council proceedings, including approvals of contracts, to promote transparency and accountability.
Finding No. 2024-001 – Procurement Award Information Cluster: Not applicable Grantor: Department of Health and Human Services (DHHS) Award Name: Community Project Funding/Congressionally Directed Spending - Construction Award Number: 6 CE1HS52894‐01‐04, 6 CE1HS52345‐01‐05 Award Year: FY2024 Assistance Listing Number: 93.493 Assistance Listing Title: Congressional Directives Pass-through Entity: Not applicable Criteria In accordance with 2 CFR 200.318 the entity must maintain procurement records of sufficient detail that include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. In accordance with 2 CFR 200.324 (a), the recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. Condition In our testing, 2 of 2 samples totaling $1,874,650 were in excess of the System’s simplified acquisition threshold of $250,000. These 2 selections funded separate capital expenditures, both of which were initially funded by nonfederal dollars. Subsequently, federal earmarks were received to partially fund these projects. As such, the System did not have support that would be required for a federal purchase. More specifically, the System did not maintain support for the procurement method selected, contract type selection, contractor selection or rejection, and the basis for the contract price in accordance with 2 CFR 200.318. In addition, the 2 selections also did not have evidence maintained of an independent cost or price analysis in accordance with CFR 200.324 (a). Cause In both circumstances, partial funding was requested to supplement larger purchases for which it was not anticipated that federal funding would be used; as such, compliance with federal funding requirements was not contemplated and thus typical support that would be required for a federal purchase was not followed. Effect The System could be entering into transactions which are not the most economical or practical procurements for the Federal Government and such transaction could be unallowed or result in unallowable costs. Questioned Costs None noted. Recommendation We recommend that the System update its procurement policy so that contemporaneous documentation and retention of evidence for the selection of each vendor that meets the System’s relevant procurement thresholds is maintained consistently in the procurement files. Documentation should clearly outline the rationale for contractor selection and the System’s independent cost or price analysis. Management’s Views and Corrective Action Plan Management’s views and corrective action plan is included at the end of this report.
Finding No. 2024-001 – Procurement Award Information Cluster: Not applicable Grantor: Department of Health and Human Services (DHHS) Award Name: Community Project Funding/Congressionally Directed Spending - Construction Award Number: 6 CE1HS52894‐01‐04, 6 CE1HS52345‐01‐05 Award Year: FY2024 Assistance Listing Number: 93.493 Assistance Listing Title: Congressional Directives Pass-through Entity: Not applicable Criteria In accordance with 2 CFR 200.318 the entity must maintain procurement records of sufficient detail that include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. In accordance with 2 CFR 200.324 (a), the recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. Condition In our testing, 2 of 2 samples totaling $1,874,650 were in excess of the System’s simplified acquisition threshold of $250,000. These 2 selections funded separate capital expenditures, both of which were initially funded by nonfederal dollars. Subsequently, federal earmarks were received to partially fund these projects. As such, the System did not have support that would be required for a federal purchase. More specifically, the System did not maintain support for the procurement method selected, contract type selection, contractor selection or rejection, and the basis for the contract price in accordance with 2 CFR 200.318. In addition, the 2 selections also did not have evidence maintained of an independent cost or price analysis in accordance with CFR 200.324 (a). Cause In both circumstances, partial funding was requested to supplement larger purchases for which it was not anticipated that federal funding would be used; as such, compliance with federal funding requirements was not contemplated and thus typical support that would be required for a federal purchase was not followed. Effect The System could be entering into transactions which are not the most economical or practical procurements for the Federal Government and such transaction could be unallowed or result in unallowable costs. Questioned Costs None noted. Recommendation We recommend that the System update its procurement policy so that contemporaneous documentation and retention of evidence for the selection of each vendor that meets the System’s relevant procurement thresholds is maintained consistently in the procurement files. Documentation should clearly outline the rationale for contractor selection and the System’s independent cost or price analysis. Management’s Views and Corrective Action Plan Management’s views and corrective action plan is included at the end of this report.
Criteria – The Agency has an established Procurement Policy which sets forth threshold and documentation requirements for management to follow to ensure that the Agency is in compliance with local as well as federal requirements. The Agency must follow the procurement standards established at 2 CFR sections 200.318 through 200.26. In addition, as part of the internal controls over federal award programs, the Agency shall maintain records in sufficient detail to document procedures were followed to ensure contracts are awarded respective to local and federal requirements. Condition - During our audit of Public Housing transactions, we noted instances where the procurement process was not adequately documented to ensure compliance with local and federal requirements. These items are summarized as follows: • Procurement Policy – During our audit, we noted the Agency has not updated its policy for several years. The policy not only should comply with local requirements but also the compliance requirements contained in 2 CFR sections 200.318 through 200.326. The current policy applies to regulations at 24 CFR 85.36 and not the current language requirements. • Procurement Approval – The Agency’s current policy requires any procurement in excess of $2,000 but not exceeding $100,000, no less than three price quotations shall be obtained where practical. The names, addresses and/or telephone numbers of the offerors and person contacted, and the date and amount of each quotation shall be recorded and maintained as public record. During our audit we noted the Agency entered into a contract for flooring and expended $43,073 but had no documentation to support that bids were obtained other than the vendor that was awarded the contract. Bids should have been obtained and documented as noted above. • Wage Rates – Projects funded with Public Housing Funds are required to comply with Wage Rate Requirements contained in Par 4, 20-001 which requires all labors and mechanics employed by contractors or subcontractor to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project. During our audit we noted the flooring contract as noted in the previous bullet point was not monitored for the prevailing wage requirement. Cause – The Agency’s internal controls are not adequate over the documentation of procurement procedures. Effect or Potential Effect - The Agency’s internal controls over procurement documentation is not adequate and the procurement policy is not updated to reflect the Federal requirements contained in 2 CFR sections 200.318 through 200.326. Recommendation - We recommend the Agency make a concentrated effort to maintain the procurement files in a manner sufficient to ensure proper procurement procedures were followed. This documentation should include the significant history of each procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection and the basis for the contract price. In addition, when required the Wage Rate compliance procedures should be documented. View of Responsible Official: Management agrees with the Finding.
Program Information: U.S. Department of the Interior Single Agreement – Assistance Listing #15.036 Award Number: A18AV00341 Award Period: 10/01/2023 – 9/30/2024 Criteria: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Per 2 CFR § 200.303 Internal controls, 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). Condition/Context: 1 of 3 procurement samples selected for testing had no documentation of bidding, alternative price quotes, or sole source documentation. Additionally, for 1 of 1 Individually Important Items and 2 of 2 suspension and debarment samples selected for testing, NWIFC could not provide support showing a SAM.gov check was performed prior to conducting business with the vendors. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: It appears the policies and procedures for procurement and suspension and debarment were not followed. Effect: Without solicitation from an adequate number of qualified sources, NWIFC is at risk of over-spending on projects and, thus, leaving fewer resources available to fulfill the mission of NWIFC. Additionally, NWIFC could be subject to other sanctions from funding agencies if they determine that programs did not assure vendors were properly checked for suspension and debarment. Questioned Costs: $25,750 for procurement. This amount represents procurement transactions selected for testing that lacked required documentation of competitive bidding, price comparisons, or sole source justifications. As a result, these costs do not meet the allowability and procurement standards under 2 CFR 200.318–200.320 and are therefore questioned. Not applicable for suspension and debarment. While internal controls were not followed, no specific transactions were identified that violated the cost allowability requirements. Repeat Finding: Yes, finding #2023-003. Recommendation: We recommend that the NWIFC adhere to program policies and procedures as documented and supporting documentation is kept available for review. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Finding Number: 2024-010 Prior Year Finding Number: N/A Compliance Requirement: Procurement and Suspension and Debarment Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: District of Columbia Public Library (DCPL) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, 2 CFR Section 200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to 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. All procurement transactions must be conducted in a manner providing full and open competition consistent in accordance with 2 CFR Section 200.319 and must be performed using the appropriate procurement method as outlined in 2 CFR Section 200.320. In accordance with 2 CFR Section 200.320(c), Noncompetitive procurement. There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. Condition – During our testing of procurement and suspension and debarment requirements, we examined the two (2) procurement contracts that comprised the entire procurement population. Based on the procedures performed, we identified one (1) contract, valued at $278,259, out of the two (2) contracts totaling $8,185,708, in which DCPL used a single source or sole source justification for the selection rationale. However, this justification did not comply with the requirements set forth in 2 CFR Section 200.320(c). Questioned Costs – Not determinable. Context – This is a condition identified per review of DCPL’s compliance with the specified requirements using a statistically valid sample. Effect – Failure to adhere to the procurement procedures specified in the Uniform Administrative Requirements may lead to the Federal agency disallowing the procurement and associated costs. Cause – While DCPL adhered to their policies and procedures for private expenditures, the agency did not adhere to federal procurement requirements (2 CFR Section 200.320(c)) listed above to support noncompetitive procurement on the requirements to use sole source. Recommendation – We recommend that management establish the requisite internal control policies and procedures to ensure that all procurements reported under the federal program are in compliance. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DCPL concurs with the auditor’s findings and recommendations. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-002 Assistance Listing, Federal Agency, and Program Name 93.912 Small Healthcare Provider Quality Improvement Program Federal Award Identification Number and Year HB147075 2022 Pass through Entity N/A Finding Type Material weakness Repeat Finding No Criteria Federal regulations require entities receiving federal funds to maintain a written procurement policy that complies with federal, state, and local regulations and that covers the different procurement methods allowed under the 2 CFR 200 ("Uniform Guidance"). Recipients are also required to maintain internal controls to ensure procurement transactions are carried out in accordance with that written policy and the requirements of 2 CFR 200.318 through 327. Condition Prisma Health's written procurement policy and procedures are not compliant with the requirements of the Uniform Guidance, and Prisma does not have the internal controls in place to ensure that procurement decisions are made in accordance with the requirements contained in 2 CFR 200.318 through 327. Questioned Costs N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context Prisma Health did not have a written procurement policy that adhered to the requirements of 2 CFR 200.318 through 200.327 and did not have procedures in place to ensure procurement decisions were made in accordance with those requirements. Cause and Effect The absence of a Uniform Guidance compliant procurement policy or internal controls to ensure procurement funded with federal awards follow the requirements in 2 CFR 200.318 through 327 increases the risk that the organization may not use federal funds for the purchase of goods and services in accordance with the requirements of the Uniform Guidance, potentially leading to noncompliance and potential questioned costs. Recommendation Prisma Health should implement a subsection into the existing procurement policy that is fully compliant with the requirements of the Uniform Guidance. This should include details on the various procurement methods, applicable thresholds, required documentation, and measures to ensure full and open competition. Views of Responsible Officials and Corrective Action Plan Prisma Health acknowledges this finding and will develop and implement a Uniform Guidance compliant procurement policy within the next month. The policy will be reviewed and approved by the CFO, head of Procurement and representatives of the Grants team. Impacted individuals will be informed and trained.
Finding 2024-005 – Procurement Policy (Repeat Finding 2023-004) Criteria: In accordance with Uniform Guidance 2 CFR, Part §200.318 "General Procurement Standards", the non-federal entity must have and use documented 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 document procedures must conform to the procurement standards identified in 2 CFR, Part §200.317 - §200.327. Condition: During our review of the Coalition's Policies and Procedures, we determined that the Coalition's Procurement policy does not comply with 2 CFR, Part §200.317 - §200.327. Questioned Costs: None Cause: The Coalition was unaware of the changes in General Procurement Standards within Uniform Guidance and therefore does not have sufficiently established control policies and procedures to comply with 2 CFR, Part §200.317 - §200.327. Effect: The Coalition does not have the ability to determine if disbursements, projects, and bids comply with 2 CFR, Part §200.317 - §200.327. Recommendation: We recommend the Coalition becomes familiar with requirements of 2 CFR, Part §200.317 - §200.327. and establishes appropriate internal control policies and procedures related to procurement and that all staff be trained in those policies and procedures, so they are familiar with the requirements. We further recommend no contract or agreement be awarded by the Coalition in which appropriate procurement policies have not been followed. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2024-005 – Procurement Policy (Repeat Finding 2023-004) Criteria: In accordance with Uniform Guidance 2 CFR, Part §200.318 "General Procurement Standards", the non-federal entity must have and use documented 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 document procedures must conform to the procurement standards identified in 2 CFR, Part §200.317 - §200.327. Condition: During our review of the Coalition's Policies and Procedures, we determined that the Coalition's Procurement policy does not comply with 2 CFR, Part §200.317 - §200.327. Questioned Costs: None Cause: The Coalition was unaware of the changes in General Procurement Standards within Uniform Guidance and therefore does not have sufficiently established control policies and procedures to comply with 2 CFR, Part §200.317 - §200.327. Effect: The Coalition does not have the ability to determine if disbursements, projects, and bids comply with 2 CFR, Part §200.317 - §200.327. Recommendation: We recommend the Coalition becomes familiar with requirements of 2 CFR, Part §200.317 - §200.327. and establishes appropriate internal control policies and procedures related to procurement and that all staff be trained in those policies and procedures, so they are familiar with the requirements. We further recommend no contract or agreement be awarded by the Coalition in which appropriate procurement policies have not been followed. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
2024-001: PROCUREMENT Type: Considered a material weakness in internal control over compliance/noncompliance Program: ALN 93.696 Certified Community Behavioral Health Clinics (CCBHC) Expansion Grants Criteria: Per 2 CFR section 200.318, the non-Federal entity, “…must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327.” Condition: During testing, it was noted that the CMHSP had not followed procurement requirements for the contract entered into for project evaluation and coordination services. Cause/Effect: Management oversight. Questioned Cost: $150,000 – the amount paid during the fiscal year pursuant to contract in question. Recommendation: We recommend that the CMHSP review/update policies and procedures to ensure that all federal requirements for procurements are followed for future contracts entered into with federal funds. Management’s Resp: Management is in agreement with this recommendation. Also, the grantor was notified of this finding and has notified the CMHSP that there is no elevated level of risk moving forward through the remainder of the grant cycle.
Finding 2024-003: Compliance finding – Procurement, Suspension, and Debarment U.S. Department of Treasury State of VT Department for Children and Families Coronavirus State & Local Fiscal Recovery Funds (ALN# 21.027) U.S. Department of Energy State of VT Department for Children and Families Weatherization Assistance for Low-Income Persons (ALN# 81.042) Condition: Required documentation within procurement files not consistently present, such as solicitation of subcontractor bids. It is imperative that all requirements described in the Organization’s procurement policies are clearly documented within the files as being met or what the status of completion is in relation to the solicitation of bids. Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: Staff attrition and lack of oversight by management. Effect: Records to document the history of procurements not present, full and open competition is not provided. Questioned costs: No questioned costs were identified. Recommendation: Although Southeastern Vermont Community Action, Inc., has a policy in place regarding procurement, we suggest that the policy be revised to more completely address the process and criteria as detailed in applicable federal regulations. It is imperative that documentation of each procurement is maintained and made easily available. The inclusion of a coversheet for each procurement can allow for easy tracking and maintenance of records. Development of such a tool can be done in collaboration with the audit team to ensure compliance with the federal regulations and internal policies and procedures.
Finding 2024-003: Compliance finding – Procurement, Suspension, and Debarment U.S. Department of Treasury State of VT Department for Children and Families Coronavirus State & Local Fiscal Recovery Funds (ALN# 21.027) U.S. Department of Energy State of VT Department for Children and Families Weatherization Assistance for Low-Income Persons (ALN# 81.042) Condition: Required documentation within procurement files not consistently present, such as solicitation of subcontractor bids. It is imperative that all requirements described in the Organization’s procurement policies are clearly documented within the files as being met or what the status of completion is in relation to the solicitation of bids. Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: Staff attrition and lack of oversight by management. Effect: Records to document the history of procurements not present, full and open competition is not provided. Questioned costs: No questioned costs were identified. Recommendation: Although Southeastern Vermont Community Action, Inc., has a policy in place regarding procurement, we suggest that the policy be revised to more completely address the process and criteria as detailed in applicable federal regulations. It is imperative that documentation of each procurement is maintained and made easily available. The inclusion of a coversheet for each procurement can allow for easy tracking and maintenance of records. Development of such a tool can be done in collaboration with the audit team to ensure compliance with the federal regulations and internal policies and procedures.
Finding 2024-003: Compliance finding – Procurement, Suspension, and Debarment U.S. Department of Treasury State of VT Department for Children and Families Coronavirus State & Local Fiscal Recovery Funds (ALN# 21.027) U.S. Department of Energy State of VT Department for Children and Families Weatherization Assistance for Low-Income Persons (ALN# 81.042) Condition: Required documentation within procurement files not consistently present, such as solicitation of subcontractor bids. It is imperative that all requirements described in the Organization’s procurement policies are clearly documented within the files as being met or what the status of completion is in relation to the solicitation of bids. Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: Staff attrition and lack of oversight by management. Effect: Records to document the history of procurements not present, full and open competition is not provided. Questioned costs: No questioned costs were identified. Recommendation: Although Southeastern Vermont Community Action, Inc., has a policy in place regarding procurement, we suggest that the policy be revised to more completely address the process and criteria as detailed in applicable federal regulations. It is imperative that documentation of each procurement is maintained and made easily available. The inclusion of a coversheet for each procurement can allow for easy tracking and maintenance of records. Development of such a tool can be done in collaboration with the audit team to ensure compliance with the federal regulations and internal policies and procedures.
Finding 2024-003: Compliance finding – Procurement, Suspension, and Debarment U.S. Department of Treasury State of VT Department for Children and Families Coronavirus State & Local Fiscal Recovery Funds (ALN# 21.027) U.S. Department of Energy State of VT Department for Children and Families Weatherization Assistance for Low-Income Persons (ALN# 81.042) Condition: Required documentation within procurement files not consistently present, such as solicitation of subcontractor bids. It is imperative that all requirements described in the Organization’s procurement policies are clearly documented within the files as being met or what the status of completion is in relation to the solicitation of bids. Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: Staff attrition and lack of oversight by management. Effect: Records to document the history of procurements not present, full and open competition is not provided. Questioned costs: No questioned costs were identified. Recommendation: Although Southeastern Vermont Community Action, Inc., has a policy in place regarding procurement, we suggest that the policy be revised to more completely address the process and criteria as detailed in applicable federal regulations. It is imperative that documentation of each procurement is maintained and made easily available. The inclusion of a coversheet for each procurement can allow for easy tracking and maintenance of records. Development of such a tool can be done in collaboration with the audit team to ensure compliance with the federal regulations and internal policies and procedures.
Finding 2024-003: Compliance finding – Procurement, Suspension, and Debarment U.S. Department of Treasury State of VT Department for Children and Families Coronavirus State & Local Fiscal Recovery Funds (ALN# 21.027) U.S. Department of Energy State of VT Department for Children and Families Weatherization Assistance for Low-Income Persons (ALN# 81.042) Condition: Required documentation within procurement files not consistently present, such as solicitation of subcontractor bids. It is imperative that all requirements described in the Organization’s procurement policies are clearly documented within the files as being met or what the status of completion is in relation to the solicitation of bids. Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: Staff attrition and lack of oversight by management. Effect: Records to document the history of procurements not present, full and open competition is not provided. Questioned costs: No questioned costs were identified. Recommendation: Although Southeastern Vermont Community Action, Inc., has a policy in place regarding procurement, we suggest that the policy be revised to more completely address the process and criteria as detailed in applicable federal regulations. It is imperative that documentation of each procurement is maintained and made easily available. The inclusion of a coversheet for each procurement can allow for easy tracking and maintenance of records. Development of such a tool can be done in collaboration with the audit team to ensure compliance with the federal regulations and internal policies and procedures.
Finding 2024-003: Compliance finding – Procurement, Suspension, and Debarment U.S. Department of Treasury State of VT Department for Children and Families Coronavirus State & Local Fiscal Recovery Funds (ALN# 21.027) U.S. Department of Energy State of VT Department for Children and Families Weatherization Assistance for Low-Income Persons (ALN# 81.042) Condition: Required documentation within procurement files not consistently present, such as solicitation of subcontractor bids. It is imperative that all requirements described in the Organization’s procurement policies are clearly documented within the files as being met or what the status of completion is in relation to the solicitation of bids. Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: Staff attrition and lack of oversight by management. Effect: Records to document the history of procurements not present, full and open competition is not provided. Questioned costs: No questioned costs were identified. Recommendation: Although Southeastern Vermont Community Action, Inc., has a policy in place regarding procurement, we suggest that the policy be revised to more completely address the process and criteria as detailed in applicable federal regulations. It is imperative that documentation of each procurement is maintained and made easily available. The inclusion of a coversheet for each procurement can allow for easy tracking and maintenance of records. Development of such a tool can be done in collaboration with the audit team to ensure compliance with the federal regulations and internal policies and procedures.
Program Information: U.S. Department of Housing and Urban Development Indian Housing Block Grant Assistance Listing #14.867 Award Numbers: 55-IH-53-18320 Award Period: 10/18/2011 – 09/30/2034 Criteria: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the suspension and debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension,” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. 2 CFR § 200.303 - Internal controls states, 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). Condition/Context: 2 of 4 samples selected for suspension and debarment testing did not have documentation of a suspension and debarment search performed prior to entering a transaction with the vendor. [ X ] Compliance Finding [ X ] Significant Deficiency [ ] Material Weakness Cause: There were ineffective controls in place during the period, along with management oversight. Effect: YNHA may unknowingly enter into business with a suspended or debarred vendor. Questioned Cost: N/A – While documentation of the suspension and debarment verification was not available, no evidence was identified indicating that payments were made to suspended or debarred parties. Therefore, no questioned costs were identified. Prior Year Finding: No. Recommendation: We recommend YNHA conduct a training for staff and program managers to review YNHA’s suspension and debarment requirements and perform searches annually. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Condition: The Organization did not maintain documented procedures, consistent with the standards identified in 2 CFR 200.317 through 200.327 of the Uniform Guidance, for procurement transactions under a federal award or subaward. The Organization also did not comply with 2 CFR 200.318 (h) and 200.214 of the Uniform Guidance including verifying that vendors for covered transactions are not debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. There were two vendors with covered transactions charged to the major program. The vendors were not debarred, suspended, or otherwise excluded. However, the Organization did not perform and document the required verification. Criteria: The Uniform Guidance requires the Organization to maintain documented procedures, consistent with the standards identified in 2 CFR 200.317 through 200.327, for procurement transactions under a federal award or subaward. The Uniform Guidance 2 CFR 200.318 (h) and 200.214 also require the Organization to verify that vendors for covered transactions are not debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Cause: The relevant procedures were not documented in a manner required by the Uniform Guidance. There was a weakness in controls involving compliance with procurement, suspension, and debarment requirements. Effect: The Organization was not in compliance with the Uniform Guidance. Recommendation: The Organization should draft and maintain documented procedures, consistent with the standards identified in 2 CFR 200.317 through 200.327 of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding. See the Corrective Action Plan.
Finding Number: 2024-002 Repeat Finding: Yes; 2023-002, 2022-002, 2021-002 Federal Program Name/Assistance Listing Title: Federal Transit Cluster Federal Assistance Listing Number: 20.507, 20.526 Federal Agency: U.S. Department of Transportation Federal Award Number: 5339-R-2022-GCTD-00039 Federal Pass-Through Agency: Texas Department of Transportation State Program Name: State Urbanized Area Formula Program, State Formula Grants For Rural Areas State Agency: Texas Department of Transportation Type of Finding: Noncompliance Material to Financial Statements and Federal/State Major Programs, Material Weakness in Internal Control Over Compliance Compliance Requirement: Procurement, Suspension and Debarment Questioned Costs: N/A; In accordance with 2 CFR 200.516(b)(7), when there are known questioned costs but the dollar amount is undetermined or not reported, the audit findings must include a description of why the dollar amount was undetermined or otherwise could not be reported. Based on our description of the finding below, the District was unable to provide evidence that the federal guidelines were followed for purchases exceeding the small purchases threshold. Due to inadequate records being maintained by the District, we were unable to determine if proper procured occurred for each purchase, and could not be located, or proper procurement never occurred. Therefore, we were unable to differentiate transactions as questioned costs from transactions in question caused solely because of deficiencies in internal control. Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR §180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System of Award Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR §180.300). Condition The District did not meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Additionally, the District did was unable to provide evidence that the federal guidelines for purchases exceeding the small purchases threshold. Cause The District’s internal controls over procurement of goods and services were not adequate. Effect The District was not in compliance with Federal regulations and guidelines related to suspension and debarment or procurement. Context The sample was not intended to be, and was not, a statistically valid sample. During our review of purchasing, we noted the following: For 4 out of 5 procurements reviewed, documentation demonstrating a vendor check for suspension and debarment was not retained. For 2 out of 5 vendors reviewed with total expenditures below the Simplified Acquisition threshold, no documentation of quotes was maintained. For 1 out of 1 vendors reviewed with total expenditures that exceeded the Simplified Acquisition threshold, no documentation of a sealed procurement issued in accordance with federal guidelines was maintained. Recommendation The District should maintain documentation of procurement actions in the vendor file including sealed procurements issued, quotes and suspension and debarment checks. Review of procurement compliance should occur before the District’s funds are obligated. Views of Responsible Officials The District agrees with the finding and has taken steps to address this issue as detailed in the Corrective Action Plan.
Finding No.: 2024-002 Federal Agency: U.S. Department of Treasury Federal Communications Commission AL Program: COVID-19 21.027 Coronavirus State and Local Fiscal Recovery Funds Requirement: Procurement Questioned Costs: $150,676 Criteria: 2 CFR 200.1, defines State as any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any agency or instrumentality thereof exclusive of local governments. 2 CFR 200.317 requires that when conducting procurement transactions under a Federal award, a State or Indian Tribe must follow the same policies and procedures it uses for procurements with non-Federal funds. If such policies and procedures do not exist, States and Indian Tribes must follow the procurement standards in §§ 200.318 through 200.327. In addition to its own policies and procedures, a State or Indian Tribe must also comply with the following procurement standards: §§ 200.321, 200.322, 200.323, and 200.327. All other recipients and subrecipients, including subrecipients of a State or Indian Tribe, must follow the procurement standards in §§ 200.318 through 200.327. Effective July 1, 2019, GMHA Materials Management Policy and Procedure Manual (Policy No. 4.2) includes the following citations: All supplies, equipment and services purchased by Guam Memorial Hospital Authority (GMHA) shall be in accordance with the provisions of the Guam Procurement Law and GMHA Rules and Regulations as amended. Title 26 of the Guam Administrative Rules and Regulations (GARR) Chapter 16, sets forth as follows: §16308. Methods of Source Selection. Unless otherwise authorized by law, all hospital contracts shall be by competitive sealed bidding, pursuant to §16309 (Competitive Sealed Bidding) of these Regulations, except as provided in: (1) Section 16310 (Procurement from Non Profit Corporations); (2) Section 16311 (Small Purchases); (3) Section 16312 (Sole Source Procurement); (4) Section 16313 (Emergency Procurement); (5) Section 16314 (Competitive Selection Procedures for Services Specified in §16212); (6) Section 16507 (Architect-Engineer and Land Surveying Services); or (7) Section 16315 (Purchase of Drugs by Generic Names). §16309. Competitive Sealed Bidding. (a) Application. The provisions of this section apply to every procurement made by competitive sealed bidding, including multi-step bidding.§16309. Competitive Sealed Bidding. (a) Application. The provisions of this section apply to every procurement made by competitive sealed bidding, including multi-step bidding.§16311. Small Purchases. (1) Application. In accordance with 5 GCA §5213 (Small Purchases) of the GuamProcurement Act, this section is established for procurement of less than five thousand dollars ($5,000) for supplies or services and less than fifteen thousand dollars ($15,000) for construction.(b) Authority to Make Small Purchases. (1) Amount. The Hospital Administrator may use this section if the procurement is to be less than five thousand dollars ($5,000) for supplies or services and less than fifteen thousand dollars ($15,000) for construction. If these methods are not used, the other methods of source selection provided in 5 GCA §5210 (Methods of Source Selection) of the Guam Procurement Act and these Regulations shall apply. Condition: For 2 (or 17%) of 12 items tested, GMHA’s method of procurement did not comply with local procurement regulations. GMHA is considered an instrumentality of the Government of Guam which is included in the definition of a State within 2 CFR 200. Accordingly, as there exists policies and procedures for procurement, such policies and procedures should have been used in conducting procurement transactions under a federal award in accordance with 2 CFR 200.317. Cause: GMHA did not use the same policies and procedures used for procurement of non-federal funds in accordance with 2 CFR 200.317. Effect: GMHA is in noncompliance with the applicable requirement. Recommendation: GMHA should adopt and implement the same policies and procedures for federal funds as those used for non-federal funds in accordance with 2 CFR 200.317. Views of Responsible Officials: Management disagrees with the finding. Management concluded that procurement thresholds is not an aspect of policies and procedures required under 2 CFR 200.317. Management concluded that higher thresholds set in 2 CFR 200.320 Simplified Acquisition Threshold as the applicable requirement. Please refer to GMHA’s views of responsible officials for their detailed response.
Finding: 2024-006 Procurement Suspension and Debarment (Significant Deficiency) Information on the Federal Programs: ALN #21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria or Specific Requirement (including Statutory, Regulatory, or Other Citation): §200.318 (i) General procurement standards, states that 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. Furthermore: §200.320 (f) Methods of procurement to be followed, states that procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when certain requirements have been met. Additionally, §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. The non-Federal entity must verify that the person with whom you intend to do business is not excluded or disqualified, by (a) checking SAM Exclusions; (b) collecting a certification from that person; (c) adding a clause or condition to the covered transaction with that person. Condition: During our audit, we noted that while DOL has formal procurement policies under §200.318(i) and §200.320(f), it did not provide sufficient records detailing the procurement history or justification for competitive and noncompetitive selections in our sample. Additionally, DOL lacks formal policies on suspension and debarment, and SAM exclusion screening documentation was not provided for the sampled contracts and vendors. Cause: DOL’s procedures did not provide for the formalization and retention of procurement records and vendor screenings consistent with the expectations outlined in 2 CFR 200. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to. Finally, DOL could inadvertently enter into a contractual relationship with an entity that is suspended, debarred or otherwise included on the US Federal sanction list. Questioned Costs: N/A Context: Our audit work in this area consisted of internal control testwork over a random sample of expenditures. We consider our samples to be representative of the respective populations, and thus, are statistically valid samples. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We then recommend that DOL develop and adhere to formal policies (as applicable) related to § 200.318 (i) General procurement standards, §200.320 (f) Methods of procurement to be followed, as well as §200.213 Reporting a determination that a non-Federal entity is not qualified for a Federal award. All procurement actions and SAM exclusion screenings should be clearly documented in writing and maintained in the vendor or contractor files.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.