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.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal 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 the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal 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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal 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. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal 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 the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal 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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal 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. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal 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 the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal 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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal 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. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal 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 the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal 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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal 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. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal 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 the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal 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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal 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. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal 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 the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal 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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal 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. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal 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 the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal 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 nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal 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. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Finding 2024-001: Written Procurement Policy This finding impacts the procurement and suspension and debarment compliance requirement for the major program, Assistance Listing Number 10.555 National School Lunch Program (Child Nutrition Cluster) funded by the Commonwealth of Massachusetts Department of Elementary and Secondary Education (DESE). Criteria: According to 2 CFR sections 200.318 through 200.326., recipients of federal awards must adhere to specific procurement standards, including maintaining documented procurement procedures, ensuring oversight of contractors, and avoiding conflicts of interest. Condition: During the fiscal year 2024 compliance testing of Nurtury’s Nutrition program, it was noted that Nurtury’s procurement policy did not align with the Uniform Guidance procurement requirements. Context: Compliance with the Uniform Guidance. Cause: Nurtury has not updated its procurement policy to reflect the current Uniform Guidance requirements. Effect: Failure to update the procurement policy in accordance with Uniform Guidance could result in questioned costs and findings related to Nurtury’s Federal programs. Was the finding a repeat of a finding in the immediate prior year?: No Questioned Costs: None Recommendation: Nurtury should revise its procurement policy to comply with Uniform Guidance requirements. Nurtury should implement procedures to periodically search for suspended or debarred vendors on Sam.gov to ensure compliance with federal guidelines. Management Response: Nurtury is in the process of updating its procurement policy to conform with Uniform Guidance procurement requirements. Management has confirmed in Sam.gov that none of their current vendors are suspended or debarred. The updated policy in development will ensure procedures to regularly search for suspended or debarred vendors on Sam.gov.
Finley School District No. 53 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls to ensure compliance with procurement requirements related to piggybacking. Assistance Listing Number and Title: Child Nutrition Cluster – ALN 10.553/555 – School Breakfast Program and National School Lunch Program Federal Grantor Name: Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction (OSPI) Pass-through Award/Contract Number: 237WAWA3N11 237WAWA3N8903 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster program, which includes the School Breakfast and National School Lunch programs. These programs provide free or reduced-price meals to students from low-income families. The District received $632,822 to administer the programs during the 2023-2024 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. These procedures must reflect the most restrictive of applicable federal, state or local laws, either obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Competitive bidding may be waived through a process commonly referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement before purchasing through another entity’s contract. If the District uses such an agreement, federal regulations require it to confirm the awarding entity followed all procurement laws and regulations applicable to the entity when selecting the contractor. In addition, the District must ensure it purchases the same goods or services as detailed in the awarding entity’s specifications and at the same specified price. Description of Condition The District’s internal controls were ineffective for ensuring compliance with federal procurement standards. The District piggybacked onto a purchasing cooperative’s contract for dairy products; however, because it was an adjustable price contract with monthly pricing changes, it did not have a process to ensure it purchased the same goods and at the same price as detailed in the purchasing cooperatives contract. We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition The District experienced turnover in the position responsible for reviewing and approving purchases. The District did not provide adequate training the new staff, so they did not know they needed to verify the goods and prices matched the current contract pricing schedule. Effect of Condition The District spent $59,526 of program funds for dairy products. Without effective internal controls that ensure it follows procurement or piggybacking procedures, the District cannot demonstrate it complied with applicable federal procurement requirements and received the current contract price for the food products. Recommendation We recommend the District strengthen its internal controls to ensure it complies with applicable procurement requirements for purchases of goods and services, including ensuring it received the current contract price. We also recommend the District provide adequate training to employees responsible for the procurement process. District’s Response The Finley School District has put in place internal controls to ensure compliance with procurement requirements related to piggybacking: The Food Service Director will compare invoices to the monthly price list to ensure contract pricing is used and initial invoices once reviewed. If there are discrepancies, the Food Service Director will contact the vendor for corrections. Quarterly, the Business Manager will select a sample of invoices to review for compliance. Auditor’s Remarks We appreciate the District’s commitment to resolve the issue. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities.
Finley School District No. 53 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls to ensure compliance with procurement requirements related to piggybacking. Assistance Listing Number and Title: Child Nutrition Cluster – ALN 10.553/555 – School Breakfast Program and National School Lunch Program Federal Grantor Name: Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction (OSPI) Pass-through Award/Contract Number: 237WAWA3N11 237WAWA3N8903 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster program, which includes the School Breakfast and National School Lunch programs. These programs provide free or reduced-price meals to students from low-income families. The District received $632,822 to administer the programs during the 2023-2024 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. These procedures must reflect the most restrictive of applicable federal, state or local laws, either obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Competitive bidding may be waived through a process commonly referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement before purchasing through another entity’s contract. If the District uses such an agreement, federal regulations require it to confirm the awarding entity followed all procurement laws and regulations applicable to the entity when selecting the contractor. In addition, the District must ensure it purchases the same goods or services as detailed in the awarding entity’s specifications and at the same specified price. Description of Condition The District’s internal controls were ineffective for ensuring compliance with federal procurement standards. The District piggybacked onto a purchasing cooperative’s contract for dairy products; however, because it was an adjustable price contract with monthly pricing changes, it did not have a process to ensure it purchased the same goods and at the same price as detailed in the purchasing cooperatives contract. We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition The District experienced turnover in the position responsible for reviewing and approving purchases. The District did not provide adequate training the new staff, so they did not know they needed to verify the goods and prices matched the current contract pricing schedule. Effect of Condition The District spent $59,526 of program funds for dairy products. Without effective internal controls that ensure it follows procurement or piggybacking procedures, the District cannot demonstrate it complied with applicable federal procurement requirements and received the current contract price for the food products. Recommendation We recommend the District strengthen its internal controls to ensure it complies with applicable procurement requirements for purchases of goods and services, including ensuring it received the current contract price. We also recommend the District provide adequate training to employees responsible for the procurement process. District’s Response The Finley School District has put in place internal controls to ensure compliance with procurement requirements related to piggybacking: The Food Service Director will compare invoices to the monthly price list to ensure contract pricing is used and initial invoices once reviewed. If there are discrepancies, the Food Service Director will contact the vendor for corrections. Quarterly, the Business Manager will select a sample of invoices to review for compliance. Auditor’s Remarks We appreciate the District’s commitment to resolve the issue. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities.
Finley School District No. 53 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls to ensure compliance with procurement requirements related to piggybacking. Assistance Listing Number and Title: Child Nutrition Cluster – ALN 10.553/555 – School Breakfast Program and National School Lunch Program Federal Grantor Name: Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction (OSPI) Pass-through Award/Contract Number: 237WAWA3N11 237WAWA3N8903 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster program, which includes the School Breakfast and National School Lunch programs. These programs provide free or reduced-price meals to students from low-income families. The District received $632,822 to administer the programs during the 2023-2024 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. These procedures must reflect the most restrictive of applicable federal, state or local laws, either obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Competitive bidding may be waived through a process commonly referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement before purchasing through another entity’s contract. If the District uses such an agreement, federal regulations require it to confirm the awarding entity followed all procurement laws and regulations applicable to the entity when selecting the contractor. In addition, the District must ensure it purchases the same goods or services as detailed in the awarding entity’s specifications and at the same specified price. Description of Condition The District’s internal controls were ineffective for ensuring compliance with federal procurement standards. The District piggybacked onto a purchasing cooperative’s contract for dairy products; however, because it was an adjustable price contract with monthly pricing changes, it did not have a process to ensure it purchased the same goods and at the same price as detailed in the purchasing cooperatives contract. We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition The District experienced turnover in the position responsible for reviewing and approving purchases. The District did not provide adequate training the new staff, so they did not know they needed to verify the goods and prices matched the current contract pricing schedule. Effect of Condition The District spent $59,526 of program funds for dairy products. Without effective internal controls that ensure it follows procurement or piggybacking procedures, the District cannot demonstrate it complied with applicable federal procurement requirements and received the current contract price for the food products. Recommendation We recommend the District strengthen its internal controls to ensure it complies with applicable procurement requirements for purchases of goods and services, including ensuring it received the current contract price. We also recommend the District provide adequate training to employees responsible for the procurement process. District’s Response The Finley School District has put in place internal controls to ensure compliance with procurement requirements related to piggybacking: The Food Service Director will compare invoices to the monthly price list to ensure contract pricing is used and initial invoices once reviewed. If there are discrepancies, the Food Service Director will contact the vendor for corrections. Quarterly, the Business Manager will select a sample of invoices to review for compliance. Auditor’s Remarks We appreciate the District’s commitment to resolve the issue. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: The Organization is required to create a written procurement, suspension and debarment policy that complies with applicable federal requirements as indicated in 2 CFR 200.318 -200.326 and to follow this policy when procuring goods and services.Condition: During the testing performed, it was determined that documentation to support quotes, estimates, or closed bids was not maintained prior to entering into contracts. Additionally, documentation was not maintained to support that the vendors were not suspended or debarred. Cause: The Organization has designed internal controls over these areas; however, the controls did not operate as designed. Effect: Purchases were made that did not adhere to the Organization’s procurement, suspension and debarment policy. Questioned costs: n/a Context: The Organization did not maintain supporting documentation that management obtained price or rate quotes for purchases above the micro-purchase threshold. In addition, the Health Center did not maintain documentation to support that the vendors were not suspended or debarred, however subsequent testing verified that none of the vendors selected for review were suspended or debarred. Repeat Finding: Yes, 2023-003 Recommendation: The Organization should review and update the procurement and suspension and debarment policies. Additionally, the Organization should provide training to staff on transactions that are covered by the procurement, suspension and debarment policies. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future procurement, suspension and debarment transactions are identified and documentation is maintained to support the evaluation.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: The Organization is required to create a written procurement, suspension and debarment policy that complies with applicable federal requirements as indicated in 2 CFR 200.318 -200.326 and to follow this policy when procuring goods and services.Condition: During the testing performed, it was determined that documentation to support quotes, estimates, or closed bids was not maintained prior to entering into contracts. Additionally, documentation was not maintained to support that the vendors were not suspended or debarred. Cause: The Organization has designed internal controls over these areas; however, the controls did not operate as designed. Effect: Purchases were made that did not adhere to the Organization’s procurement, suspension and debarment policy. Questioned costs: n/a Context: The Organization did not maintain supporting documentation that management obtained price or rate quotes for purchases above the micro-purchase threshold. In addition, the Health Center did not maintain documentation to support that the vendors were not suspended or debarred, however subsequent testing verified that none of the vendors selected for review were suspended or debarred. Repeat Finding: Yes, 2023-003 Recommendation: The Organization should review and update the procurement and suspension and debarment policies. Additionally, the Organization should provide training to staff on transactions that are covered by the procurement, suspension and debarment policies. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future procurement, suspension and debarment transactions are identified and documentation is maintained to support the evaluation.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: The Organization is required to create a written procurement, suspension and debarment policy that complies with applicable federal requirements as indicated in 2 CFR 200.318 -200.326 and to follow this policy when procuring goods and services.Condition: During the testing performed, it was determined that documentation to support quotes, estimates, or closed bids was not maintained prior to entering into contracts. Additionally, documentation was not maintained to support that the vendors were not suspended or debarred. Cause: The Organization has designed internal controls over these areas; however, the controls did not operate as designed. Effect: Purchases were made that did not adhere to the Organization’s procurement, suspension and debarment policy. Questioned costs: n/a Context: The Organization did not maintain supporting documentation that management obtained price or rate quotes for purchases above the micro-purchase threshold. In addition, the Health Center did not maintain documentation to support that the vendors were not suspended or debarred, however subsequent testing verified that none of the vendors selected for review were suspended or debarred. Repeat Finding: Yes, 2023-003 Recommendation: The Organization should review and update the procurement and suspension and debarment policies. Additionally, the Organization should provide training to staff on transactions that are covered by the procurement, suspension and debarment policies. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future procurement, suspension and debarment transactions are identified and documentation is maintained to support the evaluation.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: The Organization is required to create a written procurement, suspension and debarment policy that complies with applicable federal requirements as indicated in 2 CFR 200.318 -200.326 and to follow this policy when procuring goods and services.Condition: During the testing performed, it was determined that documentation to support quotes, estimates, or closed bids was not maintained prior to entering into contracts. Additionally, documentation was not maintained to support that the vendors were not suspended or debarred. Cause: The Organization has designed internal controls over these areas; however, the controls did not operate as designed. Effect: Purchases were made that did not adhere to the Organization’s procurement, suspension and debarment policy. Questioned costs: n/a Context: The Organization did not maintain supporting documentation that management obtained price or rate quotes for purchases above the micro-purchase threshold. In addition, the Health Center did not maintain documentation to support that the vendors were not suspended or debarred, however subsequent testing verified that none of the vendors selected for review were suspended or debarred. Repeat Finding: Yes, 2023-003 Recommendation: The Organization should review and update the procurement and suspension and debarment policies. Additionally, the Organization should provide training to staff on transactions that are covered by the procurement, suspension and debarment policies. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future procurement, suspension and debarment transactions are identified and documentation is maintained to support the evaluation.
Finding 2024-004: Reportable finding considered a significant deficiency - Noncompliance with Internal Procurement Authorization Controls Program name: Child and Adult Care Food Program Assistance Listing: 10.558 Federal awarding agency: U.S. Department of Agriculture (USDA) Pass-through Entity: Maryland State Department of Education, District of Columbia Education Office Criteria: Under 2 CFR 200.318(a), non-federal entities must establish and maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. As required under 2 CFR Subpart D (§§200.317–200.327), organizations must follow written procurement procedures that reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards in the Uniform Guidance. The Organization’s internal procurement policy includes specific thresholds for contract approvals and designates levels of review and signature authority based on the contract value. Adherence to these internal controls is essential to ensure compliance with federal procurement requirements and appropriate stewardship of federal funds. Condition: During our testing of procurement activity, we noted that a procurement contract was executed by an individual who did not have the delegated authority to approve or sign the agreement, as required by the Organization’s internal procurement policy. The contract amount exceeded the individual’s approval threshold. The policy’s required internal approval levels were not followed prior to execution. Cause: This issue appears to have resulted from a breakdown in adherence to established internal control procedures, possibly due to a lack of training or oversight. The Organization’s procurement policy was in place and compliant with 2 CFR requirements, but it was not enforced in practice. Effect: Noncompliance with internal procurement approval controls increases the risk of unauthorized or inappropriate spending, lack of transparency, and potential ineligibility of costs charged to federal programs. While the transaction itself may ultimately be allowable, failure to follow established approval protocols constitutes a significant deficiency in internal control over compliance. Repeat finding: This is not a repeat finding. Questioned costs: None identified, as the expenditure appeared otherwise allowable. However, the control deficiency presents a risk for future noncompliance. Perspective: We selected two procurement transactions from a population of four procurement transactions from this program. The issue reflects a control failure affecting procurement activity across federally funded programs and may result in future questioned costs if not corrected. Recommendation: We recommend that the Organization follow up with the relevant parties to ensure proper reporting requirements are met on a timely basis. Management’s response and corrective action plan (unaudited): See corrective action plan.
Finding 2024-004: Reportable finding considered a significant deficiency - Noncompliance with Internal Procurement Authorization Controls Program name: Child and Adult Care Food Program Assistance Listing: 10.558 Federal awarding agency: U.S. Department of Agriculture (USDA) Pass-through Entity: Maryland State Department of Education, District of Columbia Education Office Criteria: Under 2 CFR 200.318(a), non-federal entities must establish and maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. As required under 2 CFR Subpart D (§§200.317–200.327), organizations must follow written procurement procedures that reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards in the Uniform Guidance. The Organization’s internal procurement policy includes specific thresholds for contract approvals and designates levels of review and signature authority based on the contract value. Adherence to these internal controls is essential to ensure compliance with federal procurement requirements and appropriate stewardship of federal funds. Condition: During our testing of procurement activity, we noted that a procurement contract was executed by an individual who did not have the delegated authority to approve or sign the agreement, as required by the Organization’s internal procurement policy. The contract amount exceeded the individual’s approval threshold. The policy’s required internal approval levels were not followed prior to execution. Cause: This issue appears to have resulted from a breakdown in adherence to established internal control procedures, possibly due to a lack of training or oversight. The Organization’s procurement policy was in place and compliant with 2 CFR requirements, but it was not enforced in practice. Effect: Noncompliance with internal procurement approval controls increases the risk of unauthorized or inappropriate spending, lack of transparency, and potential ineligibility of costs charged to federal programs. While the transaction itself may ultimately be allowable, failure to follow established approval protocols constitutes a significant deficiency in internal control over compliance. Repeat finding: This is not a repeat finding. Questioned costs: None identified, as the expenditure appeared otherwise allowable. However, the control deficiency presents a risk for future noncompliance. Perspective: We selected two procurement transactions from a population of four procurement transactions from this program. The issue reflects a control failure affecting procurement activity across federally funded programs and may result in future questioned costs if not corrected. Recommendation: We recommend that the Organization follow up with the relevant parties to ensure proper reporting requirements are met on a timely basis. Management’s response and corrective action plan (unaudited): 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.
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.