Criteria or specific requirement: 2 CFR §200.318(a) of the Uniform Guidance states recipients of federal awards must maintain and use documented procedures for procurement transactions under a federal award, including for acquisition of property or services. These procedures must align with Uniform Guidance Standards. 2 CFR §200.318(c) of the Uniform Guidance states organizations must maintain written standards of conduct covering conflicts of interest and governing the actions of employees engaged in the selection, award, and administration of contracts. Condition: No formal policy for procurement or conflict of interest exists. Context: During procurement purchase testing, it was noted no formal policy over procurement or conflict of interest existed that met the requirements of 2 CFR §200.318(a) & 2 CFR §200.318(c). Cause: Serenity House was not aware of the requirements in the Uniform Guidance. Effect: If there were procurement purchased over the micro purchase threshold of $10,000, Serenity House could be out of compliance with federal grants. Repeat Finding: No. Recommendation: Recommend adopting a procurement and conflict of interest policy that aligns with Uniform Guidance. Views of responsible officials: Management agrees with the finding and has prepared a Corrective Action Plan.
Finding 2022-008 Material Weakness in Internal Control Over Compliance – Controls over Transfers and Procurement Federal Agency: Department of the Treasury Federal Program: 21.027 - Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Compliance Requirement: A/B – Allowable Costs/Cost Principles I – Procurement and Suspension & Debarment Criteria: Under 2 CFR §200.303, non-federal entities must establish and maintain effective internal control over federal awards to ensure compliance with federal statutes, regulations, and the award terms. • For Allowable Costs: Transfers of CSLFRF funds to support general government services must be supported by documentation demonstrating allowability, compliance, and proper review. • For Procurement and Suspension & Debarment: Per 2 CFR §§200.318–200.326 and 2 CFR §200.213, entities must follow applicable procurement procedures, including state and local bid laws, and must verify that vendors are not suspended or debarred from federal programs. Condition: Transfers made to cover general government services were not supported by documentation of a formal review or approval process. The City did not maintain evidence of procedures to verify the appropriateness or compliance of these transfers prior to execution. In addition, for procurements related to expenditures charged to CSLFRF, the City did not maintain documentation evidencing a review to ensure compliance with state bid law or verification that vendors were not suspended or debarred prior to award. Cause: The City has not implemented formal internal control procedures to document the review and approval of CSLFRF transfers used for general government services and procurement compliance checks, including bid law requirements and vendor suspension/debarment status. These gaps appear to result from limited staffing and/or a lack of awareness of specific federal documentation requirements. Effect: Without documented review and approval, there is an increased risk that CSLFRF transfers may not comply with federal requirements, leading to potential unallowable costs or questioned expenditures, and procurements may not comply with federal or state requirements, increasing the risk of awarding contracts to ineligible vendors or violating competitive procurement rules. The lack of documentation also impairs auditability and transparency in the use of federal funds. Perspective: These issues were identified during audit procedures and are considered systemic, as they affect multiple transactions and compliance requirements. These conditions reflect a lack of formal internal controls over key compliance areas. Questioned Costs: None noted. Recommendation: We recommend that the City implement formal written procedures to strengthen internal controls in the following areas: • Transfers: Require documented review and approval of all transfers, including evidence of management review, verification of eligibility, and compliance with federal guidelines. • Procurement: Require and maintain documentation of procurement reviews, including verification that proper bid laws were followed and confirmation that vendors are not suspended or debarred prior to contract award. View of Responsible Official: See corrective action plan.
Finding 2022-003: Procurement - Significant Deficiency Program name: Office for Coastal Management Assistance Listing: 11.473 Federal award Identification number: 20 NFWF 339630 Federal award year: 9/1/2020 - 8/31/2023 Federal awarding agency: U.S. Department of Commerce Criteria - Per 2 CFR 200.318 (i), recipients and subrecipients must maintain records sufficient to detail the history of each procurement. These records must include: rationale for the method of procurement; selection of contract type; contractor selection or rejection, and; basis for the contract price. Additionally, 2 CFR 200.318(a) requires entities to maintain and use documented procurement procedures that are consistent with applicable laws and regulations. Condition - The Organization has a written procurement policy in place; however, it was unable to provide documentation demonstrating that procurement transactions during the audit period were conducted in accordance with that policy. Specifically, the auditee did not retain records detailing the procurement method used, contractor selection rationale, or price justification for sampled transactions. Cause - The Organization did not maintain or consistently apply documentation protocols for internal control reviews. Formal documentation practices were not in place during the audit period. Effect - Without sufficient documentation, the auditee cannot demonstrate compliance with Federal procurement standards. This increases the risk of noncompliance with Uniform Guidance requirements and may result in unallowable costs or questioned costs. Questioned costs - None identified. Perspective - The deficiency was pervasive across multiple procurement transactions. Identification of Repeat Findings - This is not a repeat finding. Recommendation - We recommend that the Organization strengthen its internal controls over procurement by: Ensuring all procurement transactions are documented in accordance with 2 CFR 200.319(i). Training staff on documentation requirements. Periodically reviewing procurement files for completeness and compliance. Management response - See corrective action plan.
Procurement and Suspension and Debarment ALN 21.027: ARPA Water & Sewer State Recovery Funds Criteria: Recipients of these funds are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. These standards are outlined in 2 CFR sections 200.318 through 200.327, and include ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 320. Condition: The District did not provide any written policies on procurement and suspension and debarment. Context: The District has not previously had policies discussion procurement and suspension and debarment. Effect: Non-compliance with Uniform Guidance. Questioned Costs: None. Cause: The District uses professional engineering services and grant administrators to help with bidding and related requirements. Auditor Recommendation: We recommend the District establish written policies covering procurement and suspension and debarment to comply with Uniform Guidance requirements. District Response: The District did not provide a response to this finding.
AL number: 14.231 and 21.027, AL title: Emergency Solutions Grant Program and Coronavirus State and Local Fiscal Recovery Funds Federal award identification number and year:LAHSA agreements: GT-BH-ABH-021, GT-BH-RTV-001, GT-BH-RTV-002, GT-BH-RTV-003, GT-BH-RTV-004, GT-BH-RTV-009, GT-TLS-N-013, GTRRH- RR-02, GT-CH-WS-001, GT-1878-2102-001. California Department of Housing and Community Development 21-HK-17231, 21-HK-17171, 21-HK- 17192, County of Los Angeles ARPA funds awarded in 2022. Name of federal agency: U.S. Department of Housing and Urban Development and U.S. Department of the Treasury Name of pass-through entity: County of Los Angeles, Los Angeles Homeless Services Authority, California Department of Housing and Community Development Repeat finding: No Criteria: Under 2 CFR §200.318-326, non-federal entities must adhere to procurement standards for purchases made with federal funds. Key requirements include: - Full and Open Competition: Procurement transactions must be conducted to ensure open competition and prevent practices that may unduly restrict competition (2 CFR §200.319(a)). - Documentation of Procurement History: Entities must maintain records that detail the procurement history, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR §200.318(i)). - Use of Non-Competitive Procurement: Non-competitive procurement is only allowed under limited circumstances, such as when the item is available from a single source, there is a public emergency, or after solicitation of multiple sources, competition is deemed inadequate (2 CFR §200.320(c)). Condition: The organization incurred expenditures of approximately $52 million for the acquisition and renovation of motels into permanent housing using federal funds under the SLFRF program. However: - No documentation was available to demonstrate compliance with federal procurement standards, including the contractor solicitation process, selection method, or the basis for the contract price. - It is unclear whether the contractor was selected through a competitive process, or if justification for non-competitive procurement was appropriately documented as required by 2 CFR §200.320(c). - Contractor costs totaled approximately $7.8 million of the $52 million expended during the year. - The buyer and seller used the same real estate agent for the acquisition transactions. The organization also did not maintain documentation for vendors used in its Emergency Solutions Grant Program sites. These vendors consisted primarily of food providers and security services. Cause: The organization did not establish or follow sufficient internal controls to ensure compliance with federal procurement requirements, including maintaining the required documentation for procurement activities. Effect or potential effect: The lack of procurement documentation creates a significant risk that noncompliant practices occurred, such as non-competitive procurement or payments exceeding fair market value. Questioned cost: N/A Recommendation: Implement comprehensive procurement policies and procedures that comply with federal regulations under 2 CFR §200.318-326. Ensure all procurement transactions are documented, including evidence of competitive bidding or justification for non-competitive procurement under 2 CFR §200.320(c). Conduct staff training on procurement standards for federal awards, focusing on documentation, competition, and conflict of interest requirements. Perform periodic internal reviews to confirm compliance with procurement policies. Consult with California’s HCD regarding their expectations of contractor selection policies for the HomeKey program. Views of responsible officials: Management acknowledges this finding, which occurred during a period of rapid program expansion when procurement infrastructure had not yet been fully developed. Since the audit period, we have completely overhauled our procurement process to ensure full compliance with the Federal procurement standards. We have implemented a formal procurement policy, created a dedicated Procurement sub-department within Finance, hired a Procurement Supervisor and support team, and launched a new procurement software platform to ensure proper solicitation, documentation, approval routing, and record retention for all Federally funded programs. These upgrades establish consistent competitive bidding, justification procedures, conflict-of-interest safeguards, and transparent procurement. In addition, we have strengthened oversight, provided staff training on Federal procurement standards, and embedded monitoring practices to ensure ongoing compliance. Management is confident these substantial structural improvements have significantly reduced the risk of noncompliance and positioned the organization for full alignment with federal procurement standards going forward.
Criteria: Under 2 CFR 200.318 through 200.320, non-Federal entities must maintain effective oversight and internal controls over the procurement process, use appropriate methods of procurement, provide for full and open competition, perform cost or price analysis when required, and maintain sufficient documentation to support procurement decisions and contract pricing. Condition/Context: The District charged certain expenditures to federal funds; however, because management was not aware, at the time the purchases were made, that the expenditures would be federally funded, the District did not apply the Uniform Guidance procurement standards under 2 CFR 200 to those purchases. As a result, procurement activities were not performed in accordance with applicable federal requirements, and the related procurement files did not consistently contain documentation supporting the procurement method used, full and open competition or justification for limiting competition, required cost or price analysis, and complete procurement history. Therefore, the control activities designed to ensure compliance with federal procurement requirements did not operate effectively. Effect: Major federal programs tested required procurement policies and specific competitive bidding procedures to comply with the use of awarded federal funds to the District. However, the District did use multiple vendors for each project, spreading the cost amongst competing companies, and used vendors that are widely engaged by all irrigation and drainage districts in the State or Arizona. Cause: Management was not aware, at the time the purchases were made, that the related expenditures would be charged to federal funds; therefore, management did not identify the need to apply the Uniform Guidance procurement standards under 2 CFR 200. Consequently, internal controls did not operate effectively to ensure procurements charged to federal awards complied with applicable federal procurement requirements and were supported by complete documentation, including the procurement method used, competition requirements, cost or price analysis, and procurement history. Recommendation: We recommend that management formally adopt amendments to their existing procurement policies to conform with U.S. Code of Federal Regulations, Title 2, Part 200, Uniform Administrative Guidance CFR Section 318(a). Additionally, we recommend management perform competitive procurement on all purchases made with federal funds. Views of Responsible Officials and Planned Corrective Action: Management concurs with the finding, see corrective action plan.
Criteria: Under 2 CFR §200.303, non-Federal entities are required to establish and maintain effective internal controls over Federal awards to ensure compliance with federal statutes, regulations, and the terms and conditions of the award. In addition, 2 CFR §200.318–200.320 require entities to maintain records sufficient to detail the history of procurement transactions, including the rationale for contractor selection and the basis for contract price, and to ensure vendors are not suspended or debarred. Further, 2 CFR §200.302 requires recipients to maintain accurate and complete financial records that properly support and record federal expenditures. Condition: During our testing of expenditures charged to the Coronavirus State and Local Fiscal Recovery Fund under the American Rescue Plan Act (ARPA), we identified several instances where the City did not maintain adequate documentation and supporting records for program expenditures. Specifically: a. The City did not consistently maintain documentation supporting procurement decisions. Documentation for competitive bidding, vendor selection rationale, and price reasonableness was not consistently available. The City also did not provide evidence that vendors were verified against SAM.gov for suspension and debarment. Management indicated certain procurements were made under COVID-19 emergency conditions; however, written justification and required approvals were not consistently maintained. b. Expenditures totaling $1,070,694.56, out of $6,305,879.54 tested, were recorded in fiscal year 2022 instead of 2023. c. One disbursement had an invoice dated October 1, 2021, but was not paid until April 26, 2022, resulting in a delay of approximately seven months. d. For certain expenditures, purchase orders totaling $1,018,000 did not agree with related invoices totaling $1,410,483.81, indicating discrepancies between approved purchase amounts and billed amounts. Cause: These issues appear to be due to inadequate internal controls over procurement documentation, expenditure processing, and financial recordkeeping. The City did not consistently maintain documentation supporting procurement decisions, review supporting documentation for completeness, or ensure that expenditures were recorded in the appropriate accounting period. In addition, review procedures were not consistently performed to verify that supporting documents, purchase orders, and invoices were complete and consistent prior to processing payments. Effect: These deficiencies indicate significant weaknesses in the City’s internal controls over procurement documentation, expenditure review, and financial recordkeeping. As a result, the City cannot ensure that expenditures were properly authorized, supported by adequate documentation, recorded in the appropriate accounting period, or consistent with approved purchase amounts. These conditions increase the risk of unsupported or improperly recorded expenditures and limit the City’s ability to demonstrate compliance with federal requirements. Recommendation: The City should strengthen internal controls over procurement and expenditure processing by maintaining complete procurement documentation, including evidence of competitive bidding, vendor selection rationale, price reasonableness, and suspension and debarment verification. Management should also implement procedures to ensure expenditures are recorded in the correct fiscal period and that purchase orders, invoices, and supporting documentation are reviewed for completeness and consistency prior to payment. Questioned Cost: -0- View of Responsible Official: The City agrees with this finding. ARPA rules again were still developing during this time frame and some items were not a requirement during reporting. However, the City did require vendors to start registering with Sams.gov as well perform checking vendors for suspension and debarment after the rules changed.
THIS FINDING CONTAINS BOTH A MATERIAL WEAKNESS AND A SIGNIFICANT DEFICIENCY - DUE TO LIMITATIONS in SF-SAC Section 3 this is only listed as a material weakness in that form. 2022-002 The District did not have adequate internal controls for ensuring compliance with federal procurement and suspension and debarment requirements, and it did not comply with federal suspension and debarment requirements. Assistance Listing Number and Title: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Commerce Pass-through Award/Contract Number: 22-96720-205 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the Coronavirus State and Local Fiscal Recovery Funds is to respond to the COVID-19 pandemic’s negative effect on public health and the economy, provide government services to the extent COVID-19 caused a reduction in revenues collected, make necessary investments in water, sewer or broadband infrastructure, provide emergency relief from natural disasters or their negative economic impacts, fund projects eligible under certain programs administered by the U.S. Department of Transportation through three pathways and fund projects eligible under the programs stablished in Title I of the Housing and Community Development Act of 1974. In 2022, the District spent $947,806 on program funds for water/sewer broadband infrastructure. Federal regulations require recipients to establish, document and maintain effective internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Suspension and debarment Federal requirements prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the District enters into contracts or purchases goods and services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify the contractors are not suspended, debarred or otherwise excluded from participating in federal programs. The District may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must verify this before entering into the contract, and must maintain documentation demonstrating compliance with this federal requirement. Procurement 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. The procedures must reflect the most restrictive of federal, state or local procurement thresholds and methods. Federal regulations also require recipients to maintain written standards of conduct that cover conflicts of interest and govern the actions of employees involved in selecting, awarding or administrating contracts procured with federal funds. Description of Condition Suspension and debarment Although the District has a process to verify the suspension and debarment for contractors it pays more than $25,000, our audit found the District did not follow this process and did not document its verification that the contractor we tested was not suspended or debarred before purchasing from them. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Procurement In addition, our audit found the District did not have internal controls for ensuring compliance with federal procurement requirements. Specifically, the District does not have written procurement procedures as federal regulations require and does not have a standards of conduct policy covering conflicts of interest for employees or agents who award contracts, as federal regulations require. We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition Suspension and debarment Although District staff said they were aware of the requirements, they could not locate documentation to show they verified the contractor suspension and debarment status. Procurement Because the District does not regularly manage federal programs, staff were unaware of federal procurement requirements and did not know they needed written procurement procedures and standards of conduct. Effect of Condition Suspension and debarment The District did not obtain written certifications, insert clauses into the contracts, or check SAM.gov to verify the contractor it paid $871,320 with federal funds was not suspended or debarred before contracting. Without adequate internal controls, the District increases its risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any payments the District made to an ineligible party would be unallowable, and the awarding agency could potentially recover them. We subsequently verified the contractor was not suspended and debarred. Therefore, we are not questioning costs. Procurement Without written policies and procedures that conform to federal procurement standards, the District is at an increased risk of not complying with the most restrictive of federal, state or local procurement methods and standards of conduct requirements when using federal funds. Although the District did not have written policies or procedures for procurement in place, it received guidance from the federal grantor and complied with procurement requirements for the competitive solicitation and selection of the public works contract we tested. Recommendation Suspension and debarment We recommend the District strengthen its internal controls to verify all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs and maintain documentation demonstrating compliance with this requirement. Procurement We also recommend the District establish internal controls to comply with federal procurement requirements, including establishing written procurement and standards of conduct procedures that conform to federal procurement standards in Uniform Guidance (2 CFR § 200.318-327). District’s Response The District plans to follow the Washinton State Auditors Office recommendation to formally adopt a procurement and debarment polices by July 2026. The District recognizes it is in the best interests of the public to have documented policies and procedures, and those policies shall be adhered to. The District is grateful that $947,806 in grant assistance was provided, as passthrough funds that assisted an affordable housing development, and wants to ensure the public that processes and procedures were in place that minimized the risk of disbursing funds to a debarred contractor. The District’s bid documents, signed contracts, signed certifications, filings with WA State L&I, and outsourced bidder qualification review ensured qualifying bidder requirements were met prior to this projects commencement. These actions, which the SAO acknowledges did occur, address the concerns the SAO has identified. Still, the District agrees improvements can occur, and this will be addressed in a timely manner. Policies will be adopted that strengthen controls, which includes increased documentation that meets recommended State and Federal guidelines. Auditor’s Remarks We appreciate the steps the District is taking to resolve this issue. We will review the condition during our next 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 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures.
2022 – 003 Procurement and Suspension and Debarment Federal Agency: U.S. Department Treasury Federal Program Name: Coronavirus State & Local Fiscal Recovery Fund Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP3738 11/30/2021 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.318, 2 CFR 200.319, 2 CFR 200.324, 2 CFR 180.220, and 2 CFR 200.320,) requires a non-federal entity to maintain records sufficient to detail the history of procurement, the providing of full and open competition, the performing of cost or price analysis, and prohibits the non-federal entity to contract or make subawards to parties that are suspended or debarred (covered transactions over $25,000). These records will include the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, how full and open competition was provided, the cost or price analysis performed, and verification the vendor is not suspended or debarred through the SAMs exclusion list, collecting of certification from the entity, or by adding a clause or condition to the covered transaction with the entity. Procurement methods used must be appropriate based on the dollar amount and conditions specified. Condition: Procurement methods for certain federal award purchases were not adequately documented or appropriately selected in accordance with the County’s procurement policy. In addition, the County did not maintain records the vendor was not suspended or debarred prior to entering into the transactions. Questioned costs: Unknown Context: 3 of 6 tested for procurement documentation and 5 of 5 tested for suspension and debarment documentation. Cause: With new federal funding opportunities due to the pandemic, and new guidance related to those grants, proper documentation was not retained. Effect: May result in a disallowed cost if grant requirements are not followed. Repeat Finding: This is a repeat finding. Prior year finding numbers were 2021-004 and 2021-005. Recommendation: We recommend the County carefully review federal procurement requirements for proper documentation needed. The County should consider use of a Federal procurement checklist. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: 1505-0271; 2021 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.318, 2 CFR 200.319, 2 CFR 200.324 and 2 CFR 180.220) requires a non-federal entity to maintain records sufficient to detail the history of procurement, the providing of full and open competition, the performing of cost or price analysis, and prohibits the non-federal entity to contract or make subawards to parties that are suspended or debarred. These records will include the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, how full and open competition was provided, the cost or price analysis performed, and verification the vendor is not suspended or debarred through the SAMs exclusion list, collecting of certification from the entity, or by adding a clause or condition to the covered transaction with the entity. Condition: Procurement methods for certain federal award purchases were not adequately documented and the County did not verify the vendor was not suspended or debarred prior to entering into the transactions. Questioned costs: None Context: 3 of 5 tested for procurement documentation and 6 of 6 tested for suspension and debarment documentation. Cause: Lack of documentation retained over procurement rationale or cost analysis and lack of knowledge on suspension and debarment policy. Effect: Purchases are not properly documented to meet the Federal procurement requirements. CLA was able to determine the vendors were not suspended or debarred. Repeat Finding: This finding is a repeat of a finding in the prior year on a different program. Prior year finding number was 2021-003. Recommendation: We recommend the County carefully review federal procurement requirements for proper documentation needed. The County should consider use of a Federal procurement checklist. Views of responsible officials: There is no disagreement with the audit finding.
Federal Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (ARPA) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: March 3, 2021 ? December 31, 2024 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.318) requires the non-federal entity to maintain records sufficient to detail the history of procurement. In the case of an emergency or sole source purchase, proper documentation of this must be maintained. Additionally, federal guidelines require the entity to have procedures documented to verify the vendor of a covered transaction (over $25,000) is not debarred, suspended, or otherwise excluded from participating in the transaction, prior to entering into a covered transaction. Condition: Purchases deemed ?sole source? purchases were not adequately documented supporting the lack of traditional procurement processes being required. Additionally, the County did not complete suspension and debarment procedures for covered transactions. Questioned costs: None. Context: In the testing of 5 of 6 procurement transactions, the County did not maintain appropriate documentation to support why they were noncompetitive purchases. Additionally, in the testing of 5 of 6 suspension and debarment eligible transactions, the County did not complete the required suspension and debarment procedures required for covered transactions. Cause: With new federal funding opportunities arising due to the COVID-19 pandemic, and new guidance related to those grants, grant personnel were not aware of these requirements. Effect: Lack of internal control procedures can lead to noncompliance with grant requirements. Repeat Finding: N/A Recommendation: We recommend ensuring procurement procedures are complete and in accordance with Uniform Grant Guidance for any federal purchases, and available for all departments. This procedure should include verifying vendors or contractors are not suspended or debarred from doing business, prior to contracting them, and maintaining documentation of this. The County should consider adding a Federal Procurement Checklist that covers the applicable Uniform Guidance requirements that should be completed when making purchases, and retained with other procurement documents. Views of responsible officials: There is no disagreement with the audit finding.
2022 – 003 Procurement and Suspension and Debarment Federal Agency: U.S. Department Treasury Federal Program Name: Coronavirus State & Local Fiscal Recovery Fund Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP3738 11/30/2021 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matter Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.318, 2 CFR 200.319, 2 CFR 200.324, 2 CFR 180.220, and 2 CFR 200.320,) requires a non-federal entity to maintain records sufficient to detail the history of procurement, the providing of full and open competition, the performing of cost or price analysis, and prohibits the non-federal entity to contract or make subawards to parties that are suspended or debarred (covered transactions over $25,000). These records will include the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, how full and open competition was provided, the cost or price analysis performed, and verification the vendor is not suspended or debarred through the SAMs exclusion list, collecting of certification from the entity, or by adding a clause or condition to the covered transaction with the entity. Procurement methods used must be appropriate based on the dollar amount and conditions specified. Condition: Procurement methods for certain federal award purchases were not adequately documented or appropriately selected in accordance with the County’s procurement policy. In addition, the County did not maintain records the vendor was not suspended or debarred prior to entering into the transactions. Questioned costs: Unknown Context: 3 of 6 tested for procurement documentation and 5 of 5 tested for suspension and debarment documentation. Cause: With new federal funding opportunities due to the pandemic, and new guidance related to those grants, proper documentation was not retained. Effect: May result in a disallowed cost if grant requirements are not followed. Repeat Finding: This is a repeat finding. Prior year finding numbers were 2021-004 and 2021-005. Recommendation: We recommend the County carefully review federal procurement requirements for proper documentation needed. The County should consider use of a Federal procurement checklist. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: 1505-0271; 2021 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.318, 2 CFR 200.319, 2 CFR 200.324 and 2 CFR 180.220) requires a non-federal entity to maintain records sufficient to detail the history of procurement, the providing of full and open competition, the performing of cost or price analysis, and prohibits the non-federal entity to contract or make subawards to parties that are suspended or debarred. These records will include the rationale for the method of procurement, selection of contract type, contractor selection or rejection, the basis for the contract price, how full and open competition was provided, the cost or price analysis performed, and verification the vendor is not suspended or debarred through the SAMs exclusion list, collecting of certification from the entity, or by adding a clause or condition to the covered transaction with the entity. Condition: Procurement methods for certain federal award purchases were not adequately documented and the County did not verify the vendor was not suspended or debarred prior to entering into the transactions. Questioned costs: None Context: 3 of 5 tested for procurement documentation and 6 of 6 tested for suspension and debarment documentation. Cause: Lack of documentation retained over procurement rationale or cost analysis and lack of knowledge on suspension and debarment policy. Effect: Purchases are not properly documented to meet the Federal procurement requirements. CLA was able to determine the vendors were not suspended or debarred. Repeat Finding: This finding is a repeat of a finding in the prior year on a different program. Prior year finding number was 2021-003. Recommendation: We recommend the County carefully review federal procurement requirements for proper documentation needed. The County should consider use of a Federal procurement checklist. Views of responsible officials: There is no disagreement with the audit finding.
Federal Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (ARPA) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: March 3, 2021 ? December 31, 2024 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.318) requires the non-federal entity to maintain records sufficient to detail the history of procurement. In the case of an emergency or sole source purchase, proper documentation of this must be maintained. Additionally, federal guidelines require the entity to have procedures documented to verify the vendor of a covered transaction (over $25,000) is not debarred, suspended, or otherwise excluded from participating in the transaction, prior to entering into a covered transaction. Condition: Purchases deemed ?sole source? purchases were not adequately documented supporting the lack of traditional procurement processes being required. Additionally, the County did not complete suspension and debarment procedures for covered transactions. Questioned costs: None. Context: In the testing of 5 of 6 procurement transactions, the County did not maintain appropriate documentation to support why they were noncompetitive purchases. Additionally, in the testing of 5 of 6 suspension and debarment eligible transactions, the County did not complete the required suspension and debarment procedures required for covered transactions. Cause: With new federal funding opportunities arising due to the COVID-19 pandemic, and new guidance related to those grants, grant personnel were not aware of these requirements. Effect: Lack of internal control procedures can lead to noncompliance with grant requirements. Repeat Finding: N/A Recommendation: We recommend ensuring procurement procedures are complete and in accordance with Uniform Grant Guidance for any federal purchases, and available for all departments. This procedure should include verifying vendors or contractors are not suspended or debarred from doing business, prior to contracting them, and maintaining documentation of this. The County should consider adding a Federal Procurement Checklist that covers the applicable Uniform Guidance requirements that should be completed when making purchases, and retained with other procurement documents. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2022-002 ? Procurement and Suspension & Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster and Health Center Infrastructure Support Assistance Listing Number: 93.224 and 93.527; 93.526 Federal Award Identification Number: H8FCS40647-01; C8ECS44753-01 Award Periods: April 1, 2021 ? March 31, 2023; September 15, 2021 ? September 14, 2024, respectively Type of Finding: Compliance and significant deficiency in internal control over compliance Criteria: ? 200.320 Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. ? 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The organization did not maintain proper documentation for 1) determining the rationale of the sole-source procurement methodology that it applied and 2) that suspension and debarment was checked quarterly per the Organization's policy for vendors reimbursed by the federal grant. Questioned Costs: None. Context: Two (2) of two (2) procurement transactions; Two (2) of two (2) suspension and debarment transactions Cause: The organization did not document its rationale for choosing the noncompetitive procurement method or its quarterly review of suspension and debarment of vendors. Effect: The Organization may inadvertently select vendors without regard to fair competition and cost analysis or vendors that may be federally suspended and disbarred. Repeat Finding: No. Recommendation: Management should adhere to or revise the Organization?s existing procurement policy and implement a system of processes and internal controls to ensure that the appropriate level of documentation is maintained based on the procurement methodology selected for a transaction of contract. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-002 ? Procurement and Suspension & Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster and Health Center Infrastructure Support Assistance Listing Number: 93.224 and 93.527; 93.526 Federal Award Identification Number: H8FCS40647-01; C8ECS44753-01 Award Periods: April 1, 2021 ? March 31, 2023; September 15, 2021 ? September 14, 2024, respectively Type of Finding: Compliance and significant deficiency in internal control over compliance Criteria: ? 200.320 Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. ? 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The organization did not maintain proper documentation for 1) determining the rationale of the sole-source procurement methodology that it applied and 2) that suspension and debarment was checked quarterly per the Organization's policy for vendors reimbursed by the federal grant. Questioned Costs: None. Context: Two (2) of two (2) procurement transactions; Two (2) of two (2) suspension and debarment transactions Cause: The organization did not document its rationale for choosing the noncompetitive procurement method or its quarterly review of suspension and debarment of vendors. Effect: The Organization may inadvertently select vendors without regard to fair competition and cost analysis or vendors that may be federally suspended and disbarred. Repeat Finding: No. Recommendation: Management should adhere to or revise the Organization?s existing procurement policy and implement a system of processes and internal controls to ensure that the appropriate level of documentation is maintained based on the procurement methodology selected for a transaction of contract. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-002 ? Procurement and Suspension & Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster and Health Center Infrastructure Support Assistance Listing Number: 93.224 and 93.527; 93.526 Federal Award Identification Number: H8FCS40647-01; C8ECS44753-01 Award Periods: April 1, 2021 ? March 31, 2023; September 15, 2021 ? September 14, 2024, respectively Type of Finding: Compliance and significant deficiency in internal control over compliance Criteria: ? 200.320 Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. ? 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The organization did not maintain proper documentation for 1) determining the rationale of the sole-source procurement methodology that it applied and 2) that suspension and debarment was checked quarterly per the Organization's policy for vendors reimbursed by the federal grant. Questioned Costs: None. Context: Two (2) of two (2) procurement transactions; Two (2) of two (2) suspension and debarment transactions Cause: The organization did not document its rationale for choosing the noncompetitive procurement method or its quarterly review of suspension and debarment of vendors. Effect: The Organization may inadvertently select vendors without regard to fair competition and cost analysis or vendors that may be federally suspended and disbarred. Repeat Finding: No. Recommendation: Management should adhere to or revise the Organization?s existing procurement policy and implement a system of processes and internal controls to ensure that the appropriate level of documentation is maintained based on the procurement methodology selected for a transaction of contract. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-002 ? Procurement and Suspension & Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster and Health Center Infrastructure Support Assistance Listing Number: 93.224 and 93.527; 93.526 Federal Award Identification Number: H8FCS40647-01; C8ECS44753-01 Award Periods: April 1, 2021 ? March 31, 2023; September 15, 2021 ? September 14, 2024, respectively Type of Finding: Compliance and significant deficiency in internal control over compliance Criteria: ? 200.320 Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. ? 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The organization did not maintain proper documentation for 1) determining the rationale of the sole-source procurement methodology that it applied and 2) that suspension and debarment was checked quarterly per the Organization's policy for vendors reimbursed by the federal grant. Questioned Costs: None. Context: Two (2) of two (2) procurement transactions; Two (2) of two (2) suspension and debarment transactions Cause: The organization did not document its rationale for choosing the noncompetitive procurement method or its quarterly review of suspension and debarment of vendors. Effect: The Organization may inadvertently select vendors without regard to fair competition and cost analysis or vendors that may be federally suspended and disbarred. Repeat Finding: No. Recommendation: Management should adhere to or revise the Organization?s existing procurement policy and implement a system of processes and internal controls to ensure that the appropriate level of documentation is maintained based on the procurement methodology selected for a transaction of contract. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-002 ? Procurement and Suspension & Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster and Health Center Infrastructure Support Assistance Listing Number: 93.224 and 93.527; 93.526 Federal Award Identification Number: H8FCS40647-01; C8ECS44753-01 Award Periods: April 1, 2021 ? March 31, 2023; September 15, 2021 ? September 14, 2024, respectively Type of Finding: Compliance and significant deficiency in internal control over compliance Criteria: ? 200.320 Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. ? 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The organization did not maintain proper documentation for 1) determining the rationale of the sole-source procurement methodology that it applied and 2) that suspension and debarment was checked quarterly per the Organization's policy for vendors reimbursed by the federal grant. Questioned Costs: None. Context: Two (2) of two (2) procurement transactions; Two (2) of two (2) suspension and debarment transactions Cause: The organization did not document its rationale for choosing the noncompetitive procurement method or its quarterly review of suspension and debarment of vendors. Effect: The Organization may inadvertently select vendors without regard to fair competition and cost analysis or vendors that may be federally suspended and disbarred. Repeat Finding: No. Recommendation: Management should adhere to or revise the Organization?s existing procurement policy and implement a system of processes and internal controls to ensure that the appropriate level of documentation is maintained based on the procurement methodology selected for a transaction of contract. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-002 ? Procurement and Suspension & Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster and Health Center Infrastructure Support Assistance Listing Number: 93.224 and 93.527; 93.526 Federal Award Identification Number: H8FCS40647-01; C8ECS44753-01 Award Periods: April 1, 2021 ? March 31, 2023; September 15, 2021 ? September 14, 2024, respectively Type of Finding: Compliance and significant deficiency in internal control over compliance Criteria: ? 200.320 Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. ? 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The organization did not maintain proper documentation for 1) determining the rationale of the sole-source procurement methodology that it applied and 2) that suspension and debarment was checked quarterly per the Organization's policy for vendors reimbursed by the federal grant. Questioned Costs: None. Context: Two (2) of two (2) procurement transactions; Two (2) of two (2) suspension and debarment transactions Cause: The organization did not document its rationale for choosing the noncompetitive procurement method or its quarterly review of suspension and debarment of vendors. Effect: The Organization may inadvertently select vendors without regard to fair competition and cost analysis or vendors that may be federally suspended and disbarred. Repeat Finding: No. Recommendation: Management should adhere to or revise the Organization?s existing procurement policy and implement a system of processes and internal controls to ensure that the appropriate level of documentation is maintained based on the procurement methodology selected for a transaction of contract. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-002 ? Procurement and Suspension & Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster and Health Center Infrastructure Support Assistance Listing Number: 93.224 and 93.527; 93.526 Federal Award Identification Number: H8FCS40647-01; C8ECS44753-01 Award Periods: April 1, 2021 ? March 31, 2023; September 15, 2021 ? September 14, 2024, respectively Type of Finding: Compliance and significant deficiency in internal control over compliance Criteria: ? 200.320 Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. ? 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The organization did not maintain proper documentation for 1) determining the rationale of the sole-source procurement methodology that it applied and 2) that suspension and debarment was checked quarterly per the Organization's policy for vendors reimbursed by the federal grant. Questioned Costs: None. Context: Two (2) of two (2) procurement transactions; Two (2) of two (2) suspension and debarment transactions Cause: The organization did not document its rationale for choosing the noncompetitive procurement method or its quarterly review of suspension and debarment of vendors. Effect: The Organization may inadvertently select vendors without regard to fair competition and cost analysis or vendors that may be federally suspended and disbarred. Repeat Finding: No. Recommendation: Management should adhere to or revise the Organization?s existing procurement policy and implement a system of processes and internal controls to ensure that the appropriate level of documentation is maintained based on the procurement methodology selected for a transaction of contract. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-002 ? Procurement and Suspension & Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster and Health Center Infrastructure Support Assistance Listing Number: 93.224 and 93.527; 93.526 Federal Award Identification Number: H8FCS40647-01; C8ECS44753-01 Award Periods: April 1, 2021 ? March 31, 2023; September 15, 2021 ? September 14, 2024, respectively Type of Finding: Compliance and significant deficiency in internal control over compliance Criteria: ? 200.320 Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. ? 200.214 Suspension and debarment. Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The organization did not maintain proper documentation for 1) determining the rationale of the sole-source procurement methodology that it applied and 2) that suspension and debarment was checked quarterly per the Organization's policy for vendors reimbursed by the federal grant. Questioned Costs: None. Context: Two (2) of two (2) procurement transactions; Two (2) of two (2) suspension and debarment transactions Cause: The organization did not document its rationale for choosing the noncompetitive procurement method or its quarterly review of suspension and debarment of vendors. Effect: The Organization may inadvertently select vendors without regard to fair competition and cost analysis or vendors that may be federally suspended and disbarred. Repeat Finding: No. Recommendation: Management should adhere to or revise the Organization?s existing procurement policy and implement a system of processes and internal controls to ensure that the appropriate level of documentation is maintained based on the procurement methodology selected for a transaction of contract. Views of Responsible Officials: There is no disagreement with the audit finding.
Reference Number: 2022-001 Prior Year Finding: Yes – 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness, Noncompliance Criteria or specific requirement: As per § 200.318 General procurement standards. (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (d) The Non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: Based on our review of the Procurement compliance requirements, we noted that the Division has written procurement policies and competitive policies as required by CFR § 200.318 General procurement standards. We selected five (5) vendors for procurement Suspension and Debarment compliance testing of total population of 5 vendors subject to procurement and we were not provided with Procurement comparative bids therefore, we were unable: • To verify that the procurement method used was appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. • To Verify that procurements provide full and open competition (2 CFR section 200.319 and 48 CFR section 52.244-5). Cause: The Division did not ensured that as a non-Federal entity must have and must use documented procurement procedures, consistent with State, and local laws and regulations and the standards of §§ 200.318 through 200.327, for the acquisition of property or services required under a Federal award or subaward. Effect: The funding agency can reject the expenditures incurred by the Division on certain vendors where the Division must use procurement method appropriately based on the dollar amount and conditions specified in 2 CFR section 200.320. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • Use documented procurement procedures, consistent with State, and local, laws and regulations and the standards, for the acquisition of property or services required under a federal award or subaward. • The Division must maintain records sufficient to detail the history of procurement. These records should 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. Views of responsible officials: The Division will work with Territorial Headquarters to document procedures as outlined in the Recommendations above. See corrective action plan.
Reference Number: 2022-001 Prior Year Finding: Yes – 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness, Noncompliance Criteria or specific requirement: As per § 200.318 General procurement standards. (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (d) The Non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: Based on our review of the Procurement compliance requirements, we noted that the Division has written procurement policies and competitive policies as required by CFR § 200.318 General procurement standards. We selected five (5) vendors for procurement Suspension and Debarment compliance testing of total population of 5 vendors subject to procurement and we were not provided with Procurement comparative bids therefore, we were unable: • To verify that the procurement method used was appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. • To Verify that procurements provide full and open competition (2 CFR section 200.319 and 48 CFR section 52.244-5). Cause: The Division did not ensured that as a non-Federal entity must have and must use documented procurement procedures, consistent with State, and local laws and regulations and the standards of §§ 200.318 through 200.327, for the acquisition of property or services required under a Federal award or subaward. Effect: The funding agency can reject the expenditures incurred by the Division on certain vendors where the Division must use procurement method appropriately based on the dollar amount and conditions specified in 2 CFR section 200.320. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • Use documented procurement procedures, consistent with State, and local, laws and regulations and the standards, for the acquisition of property or services required under a federal award or subaward. • The Division must maintain records sufficient to detail the history of procurement. These records should 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. Views of responsible officials: The Division will work with Territorial Headquarters to document procedures as outlined in the Recommendations above. See corrective action plan.
Reference Number: 2022-001 Prior Year Finding: Yes – 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness, Noncompliance Criteria or specific requirement: As per § 200.318 General procurement standards. (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (d) The Non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: Based on our review of the Procurement compliance requirements, we noted that the Division has written procurement policies and competitive policies as required by CFR § 200.318 General procurement standards. We selected five (5) vendors for procurement Suspension and Debarment compliance testing of total population of 5 vendors subject to procurement and we were not provided with Procurement comparative bids therefore, we were unable: • To verify that the procurement method used was appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. • To Verify that procurements provide full and open competition (2 CFR section 200.319 and 48 CFR section 52.244-5). Cause: The Division did not ensured that as a non-Federal entity must have and must use documented procurement procedures, consistent with State, and local laws and regulations and the standards of §§ 200.318 through 200.327, for the acquisition of property or services required under a Federal award or subaward. Effect: The funding agency can reject the expenditures incurred by the Division on certain vendors where the Division must use procurement method appropriately based on the dollar amount and conditions specified in 2 CFR section 200.320. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • Use documented procurement procedures, consistent with State, and local, laws and regulations and the standards, for the acquisition of property or services required under a federal award or subaward. • The Division must maintain records sufficient to detail the history of procurement. These records should 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. Views of responsible officials: The Division will work with Territorial Headquarters to document procedures as outlined in the Recommendations above. See corrective action plan.
Reference Number: 2022-001 Prior Year Finding: Yes – 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness, Noncompliance Criteria or specific requirement: As per § 200.318 General procurement standards. (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (d) The Non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: Based on our review of the Procurement compliance requirements, we noted that the Division has written procurement policies and competitive policies as required by CFR § 200.318 General procurement standards. We selected five (5) vendors for procurement Suspension and Debarment compliance testing of total population of 5 vendors subject to procurement and we were not provided with Procurement comparative bids therefore, we were unable: • To verify that the procurement method used was appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. • To Verify that procurements provide full and open competition (2 CFR section 200.319 and 48 CFR section 52.244-5). Cause: The Division did not ensured that as a non-Federal entity must have and must use documented procurement procedures, consistent with State, and local laws and regulations and the standards of §§ 200.318 through 200.327, for the acquisition of property or services required under a Federal award or subaward. Effect: The funding agency can reject the expenditures incurred by the Division on certain vendors where the Division must use procurement method appropriately based on the dollar amount and conditions specified in 2 CFR section 200.320. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • Use documented procurement procedures, consistent with State, and local, laws and regulations and the standards, for the acquisition of property or services required under a federal award or subaward. • The Division must maintain records sufficient to detail the history of procurement. These records should 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. Views of responsible officials: The Division will work with Territorial Headquarters to document procedures as outlined in the Recommendations above. See corrective action plan.
Reference Number: 2022-001 Prior Year Finding: Yes – 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness, Noncompliance Criteria or specific requirement: As per § 200.318 General procurement standards. (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (d) The Non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: Based on our review of the Procurement compliance requirements, we noted that the Division has written procurement policies and competitive policies as required by CFR § 200.318 General procurement standards. We selected five (5) vendors for procurement Suspension and Debarment compliance testing of total population of 5 vendors subject to procurement and we were not provided with Procurement comparative bids therefore, we were unable: • To verify that the procurement method used was appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. • To Verify that procurements provide full and open competition (2 CFR section 200.319 and 48 CFR section 52.244-5). Cause: The Division did not ensured that as a non-Federal entity must have and must use documented procurement procedures, consistent with State, and local laws and regulations and the standards of §§ 200.318 through 200.327, for the acquisition of property or services required under a Federal award or subaward. Effect: The funding agency can reject the expenditures incurred by the Division on certain vendors where the Division must use procurement method appropriately based on the dollar amount and conditions specified in 2 CFR section 200.320. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • Use documented procurement procedures, consistent with State, and local, laws and regulations and the standards, for the acquisition of property or services required under a federal award or subaward. • The Division must maintain records sufficient to detail the history of procurement. These records should 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. Views of responsible officials: The Division will work with Territorial Headquarters to document procedures as outlined in the Recommendations above. See corrective action plan.
Reference Number: 2022-001 Prior Year Finding: Yes – 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness, Noncompliance Criteria or specific requirement: As per § 200.318 General procurement standards. (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (d) The Non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: Based on our review of the Procurement compliance requirements, we noted that the Division has written procurement policies and competitive policies as required by CFR § 200.318 General procurement standards. We selected five (5) vendors for procurement Suspension and Debarment compliance testing of total population of 5 vendors subject to procurement and we were not provided with Procurement comparative bids therefore, we were unable: • To verify that the procurement method used was appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. • To Verify that procurements provide full and open competition (2 CFR section 200.319 and 48 CFR section 52.244-5). Cause: The Division did not ensured that as a non-Federal entity must have and must use documented procurement procedures, consistent with State, and local laws and regulations and the standards of §§ 200.318 through 200.327, for the acquisition of property or services required under a Federal award or subaward. Effect: The funding agency can reject the expenditures incurred by the Division on certain vendors where the Division must use procurement method appropriately based on the dollar amount and conditions specified in 2 CFR section 200.320. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • Use documented procurement procedures, consistent with State, and local, laws and regulations and the standards, for the acquisition of property or services required under a federal award or subaward. • The Division must maintain records sufficient to detail the history of procurement. These records should 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. Views of responsible officials: The Division will work with Territorial Headquarters to document procedures as outlined in the Recommendations above. See corrective action plan.
Reference Number: 2022-001 Prior Year Finding: Yes – 2021-001 Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness, Noncompliance Criteria or specific requirement: As per § 200.318 General procurement standards. (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (d) The Non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: Based on our review of the Procurement compliance requirements, we noted that the Division has written procurement policies and competitive policies as required by CFR § 200.318 General procurement standards. We selected five (5) vendors for procurement Suspension and Debarment compliance testing of total population of 5 vendors subject to procurement and we were not provided with Procurement comparative bids therefore, we were unable: • To verify that the procurement method used was appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. • To Verify that procurements provide full and open competition (2 CFR section 200.319 and 48 CFR section 52.244-5). Cause: The Division did not ensured that as a non-Federal entity must have and must use documented procurement procedures, consistent with State, and local laws and regulations and the standards of §§ 200.318 through 200.327, for the acquisition of property or services required under a Federal award or subaward. Effect: The funding agency can reject the expenditures incurred by the Division on certain vendors where the Division must use procurement method appropriately based on the dollar amount and conditions specified in 2 CFR section 200.320. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • Use documented procurement procedures, consistent with State, and local, laws and regulations and the standards, for the acquisition of property or services required under a federal award or subaward. • The Division must maintain records sufficient to detail the history of procurement. These records should 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. Views of responsible officials: The Division will work with Territorial Headquarters to document procedures as outlined in the Recommendations above. See corrective action plan.
Criteria: Uniform Guidance requires organizations to have and document procurement and suspension and debarment procedures for the acquisition of property under a federal award in accordance with 2 CFR 200.318. Condition: The Council did not comply with the Uniform Guidance requirement for the Council to have and document procurement procedures for the acquisition of property under a federal award. Questioned Costs: $0 Cause: The Council’s internal control did not identify and establish policies for procurement and suspension and debarment; and the Council did not comply with federal requirements regarding procurement and suspension and debarment. Effect: The Council was not in compliance with Uniform Guidance 2 CFR 200.318. Recommendation: We recommend the Council develop and adopt a formal policy on procurement and suspension and debarment. Views of Responsible Officials and Planned Corrective Action: The Council began a building renovation project before it became aware that funds were available to support the project. Therefore, the Council was not able to comply with regulations at the time of project design, bidding, planning, and construction. In addition, the Council’s project was only partially funded by the Coronavirus Recovery Funds, the majority of the project was funded through the Council’s fundraising efforts. Management agrees with the finding and is in the process of implementing the recommended procedures for future projects.
Federal Programs Information: Funding Agency: Department of Health and Human Services Title: Head Start Assistance Listing Number: 93.600 Award Period: September 1, 2021 ? August 31, 2022, September 1, 2022 ? August 31, 2023 Funding Agency: Department of Health and Human Services Title: Indian Self-Determination Assistance Listing Number: 93.441 Award Period: January 1, 2022 ? December 31, 2024 Criteria: The Office?s policies and procedures contains various requirements, including policies requiring certain levels of administrative and legal review, obtaining one or more written bids at various dollar thresholds, and requiring different levels of approval based on dollar values. Uniform Guidance regulations section CFR 200.318(a) and CFR 200.320(a) state, the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurement conform to applicable Federal law and the standards identified. Condition: For Head Start, in our selected sample of 41 expenditures, we noted an expenditure of $208,932 that required either a sole source form or three written bids, and a legal review per the Office?s policy. These forms were not obtained. There was sole source justification; however, it was written by the vendor. The Tribal Council approved the purchase, but the resolution didn?t mention the vendor and/or the need to sole source the purchase. For Indian Self-Determination, in our selected sample of 40 expenditures, we noted an expenditure of $7,772 that did not have the required three written bids, an expenditure for $15,331 that did not have the required governor?s signature, and an expenditure that was approved for $365 but was later revised to $640 without any additional approvals. Questioned Costs: None. Context: 4 of 81 transactions tested across these two programs were missing documentation required by the Office?s procurement policy. Cause: The Office?s policies and procedures were not always being enforced or being followed. Additionally, the Office?s procurement policy requires sole source documentation for certain expenditures and contracts where the bidding process is bypassed, but the Office has not developed such a form. Effect: The Office was not in compliance with procurement standards and made payments during the year that were in violation of their policy. Auditors? Recommendation: We recommend the Office adhere to the procurement policy that it has developed, and we recommend a sole source form be generated that conforms to the requirements of the procurement policy. Management?s Response: For Head Start ? The Office?s procurement policy allows for sole source procurement if Tribal Council specifically authorizes its use. For the Head Start expenditure of $208,932, Tribal Council Resolution 08-2021-36 specifically approved this expenditure. The Office?s procurement policy does reference a sole source form. However, a sole source form was never created when the procurement policy was approved by Tribal Council. Therefore, a memo justifying the sole source procurement was accepted as sufficient documentation and justification of the sole source procurement. Because this was a sole source procurement, three written bids were not required. Also, legal review is not required for this expenditure because it is a purchase of goods. Legal review is only required for purchase of services above a certain threshold. The Office is in the process of updating its procurement policy and will create a sole source justification form in connection with the update. For Indian Self-Determination ? The Office acknowledges the lack of three written bids for a $7,772 expenditure. Only one written quote was obtained for this purchase. The Office also acknowledges the lack of Governor?s signature on a $15,331 purchase requisition. A new Administrative Assistant issued this purchase requisition and was not properly trained on obtaining Governor?s signature for all purchase requisitions greater than $5,000. It should be noted that Governor signed the check related to this expenditure so was able to see the purchase at that time. The Office also acknowledges a revision was not made to a $365 purchase requisition when an additional purchase was added to the approved purchase requisition.
Federal Programs Information: Funding Agency: Department of Health and Human Services Title: Head Start Assistance Listing Number: 93.600 Award Period: September 1, 2021 ? August 31, 2022, September 1, 2022 ? August 31, 2023 Funding Agency: Department of Health and Human Services Title: Indian Self-Determination Assistance Listing Number: 93.441 Award Period: January 1, 2022 ? December 31, 2024 Criteria: The Office?s policies and procedures contains various requirements, including policies requiring certain levels of administrative and legal review, obtaining one or more written bids at various dollar thresholds, and requiring different levels of approval based on dollar values. Uniform Guidance regulations section CFR 200.318(a) and CFR 200.320(a) state, the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurement conform to applicable Federal law and the standards identified. Condition: For Head Start, in our selected sample of 41 expenditures, we noted an expenditure of $208,932 that required either a sole source form or three written bids, and a legal review per the Office?s policy. These forms were not obtained. There was sole source justification; however, it was written by the vendor. The Tribal Council approved the purchase, but the resolution didn?t mention the vendor and/or the need to sole source the purchase. For Indian Self-Determination, in our selected sample of 40 expenditures, we noted an expenditure of $7,772 that did not have the required three written bids, an expenditure for $15,331 that did not have the required governor?s signature, and an expenditure that was approved for $365 but was later revised to $640 without any additional approvals. Questioned Costs: None. Context: 4 of 81 transactions tested across these two programs were missing documentation required by the Office?s procurement policy. Cause: The Office?s policies and procedures were not always being enforced or being followed. Additionally, the Office?s procurement policy requires sole source documentation for certain expenditures and contracts where the bidding process is bypassed, but the Office has not developed such a form. Effect: The Office was not in compliance with procurement standards and made payments during the year that were in violation of their policy. Auditors? Recommendation: We recommend the Office adhere to the procurement policy that it has developed, and we recommend a sole source form be generated that conforms to the requirements of the procurement policy. Management?s Response: For Head Start ? The Office?s procurement policy allows for sole source procurement if Tribal Council specifically authorizes its use. For the Head Start expenditure of $208,932, Tribal Council Resolution 08-2021-36 specifically approved this expenditure. The Office?s procurement policy does reference a sole source form. However, a sole source form was never created when the procurement policy was approved by Tribal Council. Therefore, a memo justifying the sole source procurement was accepted as sufficient documentation and justification of the sole source procurement. Because this was a sole source procurement, three written bids were not required. Also, legal review is not required for this expenditure because it is a purchase of goods. Legal review is only required for purchase of services above a certain threshold. The Office is in the process of updating its procurement policy and will create a sole source justification form in connection with the update. For Indian Self-Determination ? The Office acknowledges the lack of three written bids for a $7,772 expenditure. Only one written quote was obtained for this purchase. The Office also acknowledges the lack of Governor?s signature on a $15,331 purchase requisition. A new Administrative Assistant issued this purchase requisition and was not properly trained on obtaining Governor?s signature for all purchase requisitions greater than $5,000. It should be noted that Governor signed the check related to this expenditure so was able to see the purchase at that time. The Office also acknowledges a revision was not made to a $365 purchase requisition when an additional purchase was added to the approved purchase requisition.
Federal Programs Information: Funding Agency: Department of Health and Human Services Title: Head Start Assistance Listing Number: 93.600 Award Period: September 1, 2021 ? August 31, 2022, September 1, 2022 ? August 31, 2023 Funding Agency: Department of Health and Human Services Title: Indian Self-Determination Assistance Listing Number: 93.441 Award Period: January 1, 2022 ? December 31, 2024 Criteria: The Office?s policies and procedures contains various requirements, including policies requiring certain levels of administrative and legal review, obtaining one or more written bids at various dollar thresholds, and requiring different levels of approval based on dollar values. Uniform Guidance regulations section CFR 200.318(a) and CFR 200.320(a) state, the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurement conform to applicable Federal law and the standards identified. Condition: For Head Start, in our selected sample of 41 expenditures, we noted an expenditure of $208,932 that required either a sole source form or three written bids, and a legal review per the Office?s policy. These forms were not obtained. There was sole source justification; however, it was written by the vendor. The Tribal Council approved the purchase, but the resolution didn?t mention the vendor and/or the need to sole source the purchase. For Indian Self-Determination, in our selected sample of 40 expenditures, we noted an expenditure of $7,772 that did not have the required three written bids, an expenditure for $15,331 that did not have the required governor?s signature, and an expenditure that was approved for $365 but was later revised to $640 without any additional approvals. Questioned Costs: None. Context: 4 of 81 transactions tested across these two programs were missing documentation required by the Office?s procurement policy. Cause: The Office?s policies and procedures were not always being enforced or being followed. Additionally, the Office?s procurement policy requires sole source documentation for certain expenditures and contracts where the bidding process is bypassed, but the Office has not developed such a form. Effect: The Office was not in compliance with procurement standards and made payments during the year that were in violation of their policy. Auditors? Recommendation: We recommend the Office adhere to the procurement policy that it has developed, and we recommend a sole source form be generated that conforms to the requirements of the procurement policy. Management?s Response: For Head Start ? The Office?s procurement policy allows for sole source procurement if Tribal Council specifically authorizes its use. For the Head Start expenditure of $208,932, Tribal Council Resolution 08-2021-36 specifically approved this expenditure. The Office?s procurement policy does reference a sole source form. However, a sole source form was never created when the procurement policy was approved by Tribal Council. Therefore, a memo justifying the sole source procurement was accepted as sufficient documentation and justification of the sole source procurement. Because this was a sole source procurement, three written bids were not required. Also, legal review is not required for this expenditure because it is a purchase of goods. Legal review is only required for purchase of services above a certain threshold. The Office is in the process of updating its procurement policy and will create a sole source justification form in connection with the update. For Indian Self-Determination ? The Office acknowledges the lack of three written bids for a $7,772 expenditure. Only one written quote was obtained for this purchase. The Office also acknowledges the lack of Governor?s signature on a $15,331 purchase requisition. A new Administrative Assistant issued this purchase requisition and was not properly trained on obtaining Governor?s signature for all purchase requisitions greater than $5,000. It should be noted that Governor signed the check related to this expenditure so was able to see the purchase at that time. The Office also acknowledges a revision was not made to a $365 purchase requisition when an additional purchase was added to the approved purchase requisition.
Federal Programs Information: Funding Agency: Department of Health and Human Services Title: Head Start Assistance Listing Number: 93.600 Award Period: September 1, 2021 ? August 31, 2022, September 1, 2022 ? August 31, 2023 Funding Agency: Department of Health and Human Services Title: Indian Self-Determination Assistance Listing Number: 93.441 Award Period: January 1, 2022 ? December 31, 2024 Criteria: The Office?s policies and procedures contains various requirements, including policies requiring certain levels of administrative and legal review, obtaining one or more written bids at various dollar thresholds, and requiring different levels of approval based on dollar values. Uniform Guidance regulations section CFR 200.318(a) and CFR 200.320(a) state, the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurement conform to applicable Federal law and the standards identified. Condition: For Head Start, in our selected sample of 41 expenditures, we noted an expenditure of $208,932 that required either a sole source form or three written bids, and a legal review per the Office?s policy. These forms were not obtained. There was sole source justification; however, it was written by the vendor. The Tribal Council approved the purchase, but the resolution didn?t mention the vendor and/or the need to sole source the purchase. For Indian Self-Determination, in our selected sample of 40 expenditures, we noted an expenditure of $7,772 that did not have the required three written bids, an expenditure for $15,331 that did not have the required governor?s signature, and an expenditure that was approved for $365 but was later revised to $640 without any additional approvals. Questioned Costs: None. Context: 4 of 81 transactions tested across these two programs were missing documentation required by the Office?s procurement policy. Cause: The Office?s policies and procedures were not always being enforced or being followed. Additionally, the Office?s procurement policy requires sole source documentation for certain expenditures and contracts where the bidding process is bypassed, but the Office has not developed such a form. Effect: The Office was not in compliance with procurement standards and made payments during the year that were in violation of their policy. Auditors? Recommendation: We recommend the Office adhere to the procurement policy that it has developed, and we recommend a sole source form be generated that conforms to the requirements of the procurement policy. Management?s Response: For Head Start ? The Office?s procurement policy allows for sole source procurement if Tribal Council specifically authorizes its use. For the Head Start expenditure of $208,932, Tribal Council Resolution 08-2021-36 specifically approved this expenditure. The Office?s procurement policy does reference a sole source form. However, a sole source form was never created when the procurement policy was approved by Tribal Council. Therefore, a memo justifying the sole source procurement was accepted as sufficient documentation and justification of the sole source procurement. Because this was a sole source procurement, three written bids were not required. Also, legal review is not required for this expenditure because it is a purchase of goods. Legal review is only required for purchase of services above a certain threshold. The Office is in the process of updating its procurement policy and will create a sole source justification form in connection with the update. For Indian Self-Determination ? The Office acknowledges the lack of three written bids for a $7,772 expenditure. Only one written quote was obtained for this purchase. The Office also acknowledges the lack of Governor?s signature on a $15,331 purchase requisition. A new Administrative Assistant issued this purchase requisition and was not properly trained on obtaining Governor?s signature for all purchase requisitions greater than $5,000. It should be noted that Governor signed the check related to this expenditure so was able to see the purchase at that time. The Office also acknowledges a revision was not made to a $365 purchase requisition when an additional purchase was added to the approved purchase requisition.
Federal Programs Information: Funding Agency: Department of Health and Human Services Title: Head Start Assistance Listing Number: 93.600 Award Period: September 1, 2021 ? August 31, 2022, September 1, 2022 ? August 31, 2023 Funding Agency: Department of Health and Human Services Title: Indian Self-Determination Assistance Listing Number: 93.441 Award Period: January 1, 2022 ? December 31, 2024 Criteria: The Office?s policies and procedures contains various requirements, including policies requiring certain levels of administrative and legal review, obtaining one or more written bids at various dollar thresholds, and requiring different levels of approval based on dollar values. Uniform Guidance regulations section CFR 200.318(a) and CFR 200.320(a) state, the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurement conform to applicable Federal law and the standards identified. Condition: For Head Start, in our selected sample of 41 expenditures, we noted an expenditure of $208,932 that required either a sole source form or three written bids, and a legal review per the Office?s policy. These forms were not obtained. There was sole source justification; however, it was written by the vendor. The Tribal Council approved the purchase, but the resolution didn?t mention the vendor and/or the need to sole source the purchase. For Indian Self-Determination, in our selected sample of 40 expenditures, we noted an expenditure of $7,772 that did not have the required three written bids, an expenditure for $15,331 that did not have the required governor?s signature, and an expenditure that was approved for $365 but was later revised to $640 without any additional approvals. Questioned Costs: None. Context: 4 of 81 transactions tested across these two programs were missing documentation required by the Office?s procurement policy. Cause: The Office?s policies and procedures were not always being enforced or being followed. Additionally, the Office?s procurement policy requires sole source documentation for certain expenditures and contracts where the bidding process is bypassed, but the Office has not developed such a form. Effect: The Office was not in compliance with procurement standards and made payments during the year that were in violation of their policy. Auditors? Recommendation: We recommend the Office adhere to the procurement policy that it has developed, and we recommend a sole source form be generated that conforms to the requirements of the procurement policy. Management?s Response: For Head Start ? The Office?s procurement policy allows for sole source procurement if Tribal Council specifically authorizes its use. For the Head Start expenditure of $208,932, Tribal Council Resolution 08-2021-36 specifically approved this expenditure. The Office?s procurement policy does reference a sole source form. However, a sole source form was never created when the procurement policy was approved by Tribal Council. Therefore, a memo justifying the sole source procurement was accepted as sufficient documentation and justification of the sole source procurement. Because this was a sole source procurement, three written bids were not required. Also, legal review is not required for this expenditure because it is a purchase of goods. Legal review is only required for purchase of services above a certain threshold. The Office is in the process of updating its procurement policy and will create a sole source justification form in connection with the update. For Indian Self-Determination ? The Office acknowledges the lack of three written bids for a $7,772 expenditure. Only one written quote was obtained for this purchase. The Office also acknowledges the lack of Governor?s signature on a $15,331 purchase requisition. A new Administrative Assistant issued this purchase requisition and was not properly trained on obtaining Governor?s signature for all purchase requisitions greater than $5,000. It should be noted that Governor signed the check related to this expenditure so was able to see the purchase at that time. The Office also acknowledges a revision was not made to a $365 purchase requisition when an additional purchase was added to the approved purchase requisition.
Federal Programs Information: Funding Agency: Department of Health and Human Services Title: Head Start Assistance Listing Number: 93.600 Award Period: September 1, 2021 ? August 31, 2022, September 1, 2022 ? August 31, 2023 Funding Agency: Department of Health and Human Services Title: Indian Self-Determination Assistance Listing Number: 93.441 Award Period: January 1, 2022 ? December 31, 2024 Criteria: The Office?s policies and procedures contains various requirements, including policies requiring certain levels of administrative and legal review, obtaining one or more written bids at various dollar thresholds, and requiring different levels of approval based on dollar values. Uniform Guidance regulations section CFR 200.318(a) and CFR 200.320(a) state, the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurement conform to applicable Federal law and the standards identified. Condition: For Head Start, in our selected sample of 41 expenditures, we noted an expenditure of $208,932 that required either a sole source form or three written bids, and a legal review per the Office?s policy. These forms were not obtained. There was sole source justification; however, it was written by the vendor. The Tribal Council approved the purchase, but the resolution didn?t mention the vendor and/or the need to sole source the purchase. For Indian Self-Determination, in our selected sample of 40 expenditures, we noted an expenditure of $7,772 that did not have the required three written bids, an expenditure for $15,331 that did not have the required governor?s signature, and an expenditure that was approved for $365 but was later revised to $640 without any additional approvals. Questioned Costs: None. Context: 4 of 81 transactions tested across these two programs were missing documentation required by the Office?s procurement policy. Cause: The Office?s policies and procedures were not always being enforced or being followed. Additionally, the Office?s procurement policy requires sole source documentation for certain expenditures and contracts where the bidding process is bypassed, but the Office has not developed such a form. Effect: The Office was not in compliance with procurement standards and made payments during the year that were in violation of their policy. Auditors? Recommendation: We recommend the Office adhere to the procurement policy that it has developed, and we recommend a sole source form be generated that conforms to the requirements of the procurement policy. Management?s Response: For Head Start ? The Office?s procurement policy allows for sole source procurement if Tribal Council specifically authorizes its use. For the Head Start expenditure of $208,932, Tribal Council Resolution 08-2021-36 specifically approved this expenditure. The Office?s procurement policy does reference a sole source form. However, a sole source form was never created when the procurement policy was approved by Tribal Council. Therefore, a memo justifying the sole source procurement was accepted as sufficient documentation and justification of the sole source procurement. Because this was a sole source procurement, three written bids were not required. Also, legal review is not required for this expenditure because it is a purchase of goods. Legal review is only required for purchase of services above a certain threshold. The Office is in the process of updating its procurement policy and will create a sole source justification form in connection with the update. For Indian Self-Determination ? The Office acknowledges the lack of three written bids for a $7,772 expenditure. Only one written quote was obtained for this purchase. The Office also acknowledges the lack of Governor?s signature on a $15,331 purchase requisition. A new Administrative Assistant issued this purchase requisition and was not properly trained on obtaining Governor?s signature for all purchase requisitions greater than $5,000. It should be noted that Governor signed the check related to this expenditure so was able to see the purchase at that time. The Office also acknowledges a revision was not made to a $365 purchase requisition when an additional purchase was added to the approved purchase requisition.
2022-001 Methods of Procurement Federal Agency: United States Department of Treasury Federal Program Name: Coronavirus State and Local Recovery Funds (CSLRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLT-8694, 2021 Award Period: March 3, 2021 to December 31, 2025 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of federal procurement guidelines. US Code ? 200.320 states that the non-Federal entity must have and use documented procurement procedures, consistent with the standards of ? 200.320 and ?? 200.317, 200.318, and 200.319 for any of the methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Condition: The County entered into a noncompetitive procurement contract with a vendor under specific circumstances for an emergency procurement. The County did not document the justification or approval of the noncompetitive emergency procurement. The County?s internal procurement policies state that deviations from standard purchasing procedures must be authorized and all such deviations will be documented and all emergency purchases shall be in a report to the Board of County Commissioners at its next regular Commission meeting. Context: One of five procurement contracts tested did not contain appropriate documentation supporting federal procurement requirements. Cause: The County did not follow their procurement policies and procedures to properly document the justification and approval of an emergency procurement transaction that was made using federal funding and requirements for noncompetitive emergency procurements. Effect: By not following federal regulations and the County?s procurement policy, the County could improperly enter into a contract that violates the requirements of CFR ? 200.320. Repeat Finding: No Recommendation: We recommend that the County review their policies and procedures to ensure that they are operating in a manner that follows federal procurement requirements and the County?s procurement policy. The creation and use of a standard procurement checklist would assist the County in documenting all requirements for each procurement that is entered into. Views of Responsible Officials: The Finance Department will work with County Management and Board Departments to ensure familiarity and understanding of the County?s procurement policies and procedures. Additionally, the County is working towards the implementation of a financial system which will improve the controls in place to help ensure compliance with procurement requirements. The Finance Department is also working on a financial policies document and will would with County Manager on a review of the County?s procurement policy.
Significant Deficiency 2 CFR ? 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ? 200.302 (b) (6) and (7) which requires the Authority to establish written procedures for determining the allowability of costs in accordance with Subpart E - Cost Principles and the terms and conditions of the Federal award and establish written procedures to implement the requirements of ? 305 Payment. Additionally, 2 C.F.R. ? 2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 C.F.R. ? 200.318(a) which states the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. Although the Authority did have written standard operating procedures requiring purchase orders, they did not have an approved purchase order or contract on file for 2 of the 50 purchases tested. Failure to have proper controls in place to ensure policies and procedures are being followed could result in unallowable costs and procurement noncompliance. The Authority should follow their written standard operating procedures and implement controls to ensure allowability of costs and procurement in accordance with federal grants.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: LA003, 2022 Award Period: 10/1/21-9/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. 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. 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). Under the micropurchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micropurchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 3. 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)). 4. 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)). 5. 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.? When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During testing, it was noted that the Authority did not have adequate internal controls over procurement and suspension and debarment requirements. Questioned Costs: $135,749 Context: During testing of a sample of 7 contracts, it was noted that 7 contracts did not comply with compliance requirements. The sample was a statistically valid sample. ? For 2 contracts tested, the Authority was unable to provide a copy of the contract, or documentation to support the contract was properly procured. ? For 3 contracts tested, the Authority was unable to provide documentation to support that a cost analysis was performed prior to entering the contract. ? For all 7 contracts tested, the Authority was unable to provide documentation that it ensured the vendor was not suspended or debarred before entering into the contract. Cause: The Authority failed to maintain proper documentation of contracts and procurement procedures to evidence compliance. Effect: The Authority is not in compliance with federal regulations regarding procurement of contracts, which could lead to vendors receiving funds that are not properly vetted. Recommendation: We recommend that the Authority reviews it?s procurement policy and active contracts and future contracts to ensure that all policies and procedures regarding procurement of contracts are properly followed and documented. Views of Responsible Officials: There is no disagreement with the audit finding.
Criteria: 2 CFR Part 200 in general and 2 CFR section 200.332 require non-Federal entities to establish and maintain effective internal controls over Federal awards, including the requirements for allowable costs, cost principles, reporting, and suspension and debarment. The related compliance requirements are set in 2 CFR Part 200 sections 200.514(c), 200.212, 200.318(h), 180.300 and subpart E; 48 CFR section 52.209-6; 31 CFR section 19.300; sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 as codified at 42 USC 802 and 803 and 31 CFR Part 35, federal awarding agency regulations, and the terms and conditions of the award. Condition: Controls related to calculation and reporting of lost revenue were not effective and the amount calculated as base year revenue was incorrectly reported. Controls related to reporting of other grant expenditures were not effective and certain amounts were missing from the financial reports. Controls related to ensuring contractors were not suspended, debarred, or otherwise excluded pursuant to 31 CFR section 19.300 were not documented in a manner that is reperformable. Cause: Base year calculation of revenue was performed using interim financial information and was not reconciled to final audited reports. Base year calculation of revenue was not clearly documented. Subsequent year revenue calculations were performed by a consultant who was not engaged to review the base year calculation. Controls over such calculations were not effective. Review of financial reports was not sufficient to ensure all grant expenditures were reported. Suspension and debarment controls were not evidenced with clear documentation; checklists are maintained but were not completed in all cases. Effect: Calculation of lost revenue was incorrectly reported. Expenditures related to the provision of government services related to such lost revenue did not exceed the actual lost revenue. Certain other grant expenditures were erroneously excluded from the financial reports. Procurement of contractors risks including those who were suspended or debarred; however none such were identified. Recommendation: We recommend that the City ensure that all controls for grants be documented in written procedures which should include the name or title of the positions responsible for each control (preparation, review, reconciliation, etc.) and that the performance of the controls be documented in a clear, reperformable manner including the name and date of each responsible individual and which specific control they performed over compliance for the grant.
Federal Agency: U.S. Small Business Administration Federal Program: 59.075 Shuttered Venue Operators Program Grant Period: Year ended September 30, 2022 Criteria: 2 CFR 200.302(b)(7), 2 CFR 200.318(c)(1) Condition: Written policies and procedures for the determination of allowable of costs, conflicts of interest, and procedures for procurement transactions surrounding federal awards were not available. Cause: Unfamiliarity with requirements stated in 2 CFR 200 of the Uniform Guidance. Potential Effect: Instances of noncompliance with direct and material compliance requirements may occur. Repeat Finding: No Management?s Response and Planned Corrective Action: In the event of receipt of future Federal Awards, management and the board of directors will work towards developing a Federal Award Policy and Procedure Manual to be used for federal awards management. Responsible Person: Tim Stephens, Executive Director
Information on the Federal Program: Program Name: Congressional Appropriations Program Federal Agency: United States Department of Treasury AL Number/Name: 21.U01 NeighborWorks? System Program FY 2022 Appropriation 21.U04 COVID-19 American Rescue Plan Criteria: According to 2 CFR ? 200.318(a), General Procurement Standards, the non-Federal entity must have and use documented procurement procedures, consistent with State and local laws and regulations, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in the Uniform Guidance. In addition, 2 CFR ?200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All procurement transactions must be conducted in a manner providing full and open competition consistent with ?200.319 and must be performed using the appropriate procurement method as outlined in ?200.320. Furthermore, 2 CFR ?200.320(c), Noncompetitive Procurement, states that there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Condition: During our review of the Corporation?s procurement policies, we noted that the Corporation?s written internal procurement policies and procedures are not in conformity with the requirements identified in the Uniform Guidance procurement requirements. During our testing of the procurement, suspension and debarment compliance requirement, we selected 54 procurement samples for testing. We noted that 12 out of the 54 procurement samples were procured by way of a noncompetitive proposal process through a solicitation from only one source under the criteria of either: (1) the item is available only from a single source or (2) there is an urgent and compelling need for the goods or services. However, based on our review of the 12 procurement files, we noted that all of the 12 procurement files do not appropriately justify the use of a noncompetitive procurement process due to the following reasons: 1. The supplies or services being procured are sold or provided by other vendors, not just by a single source. 2. Incumbency of the vendor is not a valid noncompetitive procurement justification. 3. Contracting without providing for full and open competition shall not be justified on the basis of (1) lack of advance planning by the requiring activity; or (2) concerns related to the amount of funds available for the acquisition of supplies or services. Cause: The Corporation?s personnel did not adhere to the federal requirements and the Corporation?s internal procurement policies and procedures particularly on the use of noncompetitive procurements. Effect: Failure to perform procurement procedures in accordance with the Corporation?s documented policies and the procurement procedures under the Uniform Guidance procurement requirements could result in expenditures incurred being disallowed. Questioned Costs: Not determinable. Context: This is a condition identified per review of the Corporation?s compliance with the specified requirements using a non-statistical sample. The total federal expenditures related to the 12 noncompetitive procurements is $2,786,980 for the year ended September 30, 2022. The total contract value of the 12 noncompetitive procurements is $13,507,008 with contract terms that ranges from 3 to 5 years. The total federal expenditures for all of the 54 procurement samples selected for testing is $9,409,871 from a total population of expenditures subject to procurement of $15,481,554 for the year ended September 30, 2022. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Corporation update its current procurement policies and procedures to conform with the requirements identified in the Uniform Guidance procurement requirements. In addition, the Corporation should ensure that the use of the Noncompetitive Procurement criteria under the Uniform Guidance procurement requirements are adhered to and appropriate justifications for these contracts are used and documented appropriately. Finally, the Corporation should have a system in place to track and monitor the terms of vendor contracts in order to plan in advance if the contracts will need to be subject to a competitive procurement process providing full and open competition as required. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Information on the Federal Program: Program Name: Congressional Appropriations Program Federal Agency: United States Department of Treasury AL Number/Name: 21.U01 NeighborWorks? System Program FY 2022 Appropriation 21.U04 COVID-19 American Rescue Plan Criteria: According to 2 CFR ? 200.318(a), General Procurement Standards, the non-Federal entity must have and use documented procurement procedures, consistent with State and local laws and regulations, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in the Uniform Guidance. In addition, 2 CFR ?200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All procurement transactions must be conducted in a manner providing full and open competition consistent with ?200.319 and must be performed using the appropriate procurement method as outlined in ?200.320. Furthermore, 2 CFR ?200.320(c), Noncompetitive Procurement, states that there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Condition: During our review of the Corporation?s procurement policies, we noted that the Corporation?s written internal procurement policies and procedures are not in conformity with the requirements identified in the Uniform Guidance procurement requirements. During our testing of the procurement, suspension and debarment compliance requirement, we selected 54 procurement samples for testing. We noted that 12 out of the 54 procurement samples were procured by way of a noncompetitive proposal process through a solicitation from only one source under the criteria of either: (1) the item is available only from a single source or (2) there is an urgent and compelling need for the goods or services. However, based on our review of the 12 procurement files, we noted that all of the 12 procurement files do not appropriately justify the use of a noncompetitive procurement process due to the following reasons: 1. The supplies or services being procured are sold or provided by other vendors, not just by a single source. 2. Incumbency of the vendor is not a valid noncompetitive procurement justification. 3. Contracting without providing for full and open competition shall not be justified on the basis of (1) lack of advance planning by the requiring activity; or (2) concerns related to the amount of funds available for the acquisition of supplies or services. Cause: The Corporation?s personnel did not adhere to the federal requirements and the Corporation?s internal procurement policies and procedures particularly on the use of noncompetitive procurements. Effect: Failure to perform procurement procedures in accordance with the Corporation?s documented policies and the procurement procedures under the Uniform Guidance procurement requirements could result in expenditures incurred being disallowed. Questioned Costs: Not determinable. Context: This is a condition identified per review of the Corporation?s compliance with the specified requirements using a non-statistical sample. The total federal expenditures related to the 12 noncompetitive procurements is $2,786,980 for the year ended September 30, 2022. The total contract value of the 12 noncompetitive procurements is $13,507,008 with contract terms that ranges from 3 to 5 years. The total federal expenditures for all of the 54 procurement samples selected for testing is $9,409,871 from a total population of expenditures subject to procurement of $15,481,554 for the year ended September 30, 2022. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Corporation update its current procurement policies and procedures to conform with the requirements identified in the Uniform Guidance procurement requirements. In addition, the Corporation should ensure that the use of the Noncompetitive Procurement criteria under the Uniform Guidance procurement requirements are adhered to and appropriate justifications for these contracts are used and documented appropriately. Finally, the Corporation should have a system in place to track and monitor the terms of vendor contracts in order to plan in advance if the contracts will need to be subject to a competitive procurement process providing full and open competition as required. Views of Responsible Officials: Management agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Section III ? Federal Award Findings Finding 2022-002 Lack of Internal Control Over Procurement Federal Agency: U.S. Department of the Treasury Federal Programs: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award Numbers: SLFRP2526 and SLFRP4713 Award Years: 2021 Type of Finding: Significant deficiency in internal control and noncompliance. Criteria: In accordance with 2 CFR sections 200.318 to 200.325, procurement policies must be in place to ensure the Tribe is promoting full and open competition consistent with the standards of these sections. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Condition and Context: Management could not provide adequate procurement documentation for the purchase of a large piece of equipment. During our testing of allowable costs charged to the program we noted one transaction out of twenty-nine tested that lacked adequate supporting documentation related to procurement. Cause: Lack of internal controls over procurement. Effect: Failure to follow compliance requirements could result in loss of federal funding or questioned costs being incurred. Questioned Costs: None noted. The price for the piece of equipment did not seem unreasonable; however, we were unable to determine if the Tribe received the lowest price possible due to lack of procurement documentation. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that management establish a procurement policy and ensure that the policy is followed for all large purchases. Management?s Response: Management concurs with this finding. See corrective action plan.
Section III ? Federal Award Findings Finding 2022-002 Lack of Internal Control Over Procurement Federal Agency: U.S. Department of the Treasury Federal Programs: Coronavirus State and Local Fiscal Recovery Funds ALN: 21.027 Award Numbers: SLFRP2526 and SLFRP4713 Award Years: 2021 Type of Finding: Significant deficiency in internal control and noncompliance. Criteria: In accordance with 2 CFR sections 200.318 to 200.325, procurement policies must be in place to ensure the Tribe is promoting full and open competition consistent with the standards of these sections. In order to ensure objective contractor performance and eliminate unfair competitive advantage, contractors that develop or draft specifications, requirements, statements of work, or invitations for bids or requests for proposals must be excluded from competing for such procurements. Condition and Context: Management could not provide adequate procurement documentation for the purchase of a large piece of equipment. During our testing of allowable costs charged to the program we noted one transaction out of twenty-nine tested that lacked adequate supporting documentation related to procurement. Cause: Lack of internal controls over procurement. Effect: Failure to follow compliance requirements could result in loss of federal funding or questioned costs being incurred. Questioned Costs: None noted. The price for the piece of equipment did not seem unreasonable; however, we were unable to determine if the Tribe received the lowest price possible due to lack of procurement documentation. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that management establish a procurement policy and ensure that the policy is followed for all large purchases. Management?s Response: Management concurs with this finding. See corrective action plan.
SIGNIFICANT DEFICIENCY U.S. Department of Health and Human Services 2022-001 Title III Aging Cluster: Title III B Supportive Services CFDA 93.044 Title III C Nutrition Services CFDA 93.045 Title III C Nutrition Services Incentive CFDA 93.053 Grant period ? year ended September 30, 2023 Condition: The Organization did not have a written procurement policy to properly implement all the requirements of 2 CFR Section 200.318 through 200.326 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Criteria: In accordance with 2 CFR Section 200.319(c), non-federal entities must have written procedures for procurement transactions. Such policy should incorporate all requirements within 2 CFR 200.318 through 200.326 of the Uniform Guidance. Cause: The Organization?s procurement policy does not incorporate all the requirements of 2 CFR Section 200.318 through 200.326 of the Uniform Guidance. Effect: An important component of internal controls is the existence of operating policies and procedures and that they are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program compliance requirements. Recommendation: Management should continue to develop comprehensive written policies and procedures to administer all federal programs. Current written policies should be evaluated for inclusion of and compliance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will adopt written policies to comply with Uniform Guidance requirements.
SIGNIFICANT DEFICIENCY U.S. Department of Health and Human Services 2022-001 Title III Aging Cluster: Title III B Supportive Services CFDA 93.044 Title III C Nutrition Services CFDA 93.045 Title III C Nutrition Services Incentive CFDA 93.053 Grant period ? year ended September 30, 2023 Condition: The Organization did not have a written procurement policy to properly implement all the requirements of 2 CFR Section 200.318 through 200.326 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Criteria: In accordance with 2 CFR Section 200.319(c), non-federal entities must have written procedures for procurement transactions. Such policy should incorporate all requirements within 2 CFR 200.318 through 200.326 of the Uniform Guidance. Cause: The Organization?s procurement policy does not incorporate all the requirements of 2 CFR Section 200.318 through 200.326 of the Uniform Guidance. Effect: An important component of internal controls is the existence of operating policies and procedures and that they are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program compliance requirements. Recommendation: Management should continue to develop comprehensive written policies and procedures to administer all federal programs. Current written policies should be evaluated for inclusion of and compliance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will adopt written policies to comply with Uniform Guidance requirements.
SIGNIFICANT DEFICIENCY U.S. Department of Health and Human Services 2022-001 Title III Aging Cluster: Title III B Supportive Services CFDA 93.044 Title III C Nutrition Services CFDA 93.045 Title III C Nutrition Services Incentive CFDA 93.053 Grant period ? year ended September 30, 2023 Condition: The Organization did not have a written procurement policy to properly implement all the requirements of 2 CFR Section 200.318 through 200.326 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Criteria: In accordance with 2 CFR Section 200.319(c), non-federal entities must have written procedures for procurement transactions. Such policy should incorporate all requirements within 2 CFR 200.318 through 200.326 of the Uniform Guidance. Cause: The Organization?s procurement policy does not incorporate all the requirements of 2 CFR Section 200.318 through 200.326 of the Uniform Guidance. Effect: An important component of internal controls is the existence of operating policies and procedures and that they are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program compliance requirements. Recommendation: Management should continue to develop comprehensive written policies and procedures to administer all federal programs. Current written policies should be evaluated for inclusion of and compliance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will adopt written policies to comply with Uniform Guidance requirements.
SIGNIFICANT DEFICIENCY U.S. Department of Health and Human Services 2022-001 Title III Aging Cluster: Title III B Supportive Services CFDA 93.044 Title III C Nutrition Services CFDA 93.045 Title III C Nutrition Services Incentive CFDA 93.053 Grant period ? year ended September 30, 2023 Condition: The Organization did not have a written procurement policy to properly implement all the requirements of 2 CFR Section 200.318 through 200.326 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Criteria: In accordance with 2 CFR Section 200.319(c), non-federal entities must have written procedures for procurement transactions. Such policy should incorporate all requirements within 2 CFR 200.318 through 200.326 of the Uniform Guidance. Cause: The Organization?s procurement policy does not incorporate all the requirements of 2 CFR Section 200.318 through 200.326 of the Uniform Guidance. Effect: An important component of internal controls is the existence of operating policies and procedures and that they are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program compliance requirements. Recommendation: Management should continue to develop comprehensive written policies and procedures to administer all federal programs. Current written policies should be evaluated for inclusion of and compliance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will adopt written policies to comply with Uniform Guidance requirements.
SIGNIFICANT DEFICIENCY U.S. Department of Health and Human Services 2022-001 Title III Aging Cluster: Title III B Supportive Services CFDA 93.044 Title III C Nutrition Services CFDA 93.045 Title III C Nutrition Services Incentive CFDA 93.053 Grant period ? year ended September 30, 2023 Condition: The Organization did not have a written procurement policy to properly implement all the requirements of 2 CFR Section 200.318 through 200.326 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Criteria: In accordance with 2 CFR Section 200.319(c), non-federal entities must have written procedures for procurement transactions. Such policy should incorporate all requirements within 2 CFR 200.318 through 200.326 of the Uniform Guidance. Cause: The Organization?s procurement policy does not incorporate all the requirements of 2 CFR Section 200.318 through 200.326 of the Uniform Guidance. Effect: An important component of internal controls is the existence of operating policies and procedures and that they are clearly understood and communicated. Without clear written policies and procedures, there is a higher risk of noncompliance with program compliance requirements. Recommendation: Management should continue to develop comprehensive written policies and procedures to administer all federal programs. Current written policies should be evaluated for inclusion of and compliance with Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and will adopt written policies to comply with Uniform Guidance requirements.