2024-002: Written Procurement, Suspension and Debarment Policy Finding Prior Year Findings: Yes, 2023-003 Department Agency: Department of Treasury State Department: Wyoming State Loan & Investment Board Office of State Lands & Investments Assistance Listing Number: ALN #21.027 Compliance Area: Procurement & Suspension & Debarment (I) Type of Finding: Significant Deficiency Questioned Costs: None Criteria: The Town of Dayton should have written standards of conduct in place to verify any entity(vendor) with which the Town spends Federal expenditures or conducts business transactions be not debarred, suspended, or otherwise excluded per 2 CFR 200.318(h) and 2 CFR 180. The written standard should address conduct convering conflicts of interest governing the performance of its employees and contractors engaged in the selections, award, and administartion of contracts (Uniform Guidance Section 200.318 and 45 CFR sections 52.203-13 and 52.203-16). Condition: The Town of Dayton did not have written controsl in palce to ensure that vendors were not suspended or debarred or included in the list of vendors prior to entering into a contract wit hthe Town. The written standard of conduct covering conflicts of interest and governing the performance of its employees and contractors must be documented when engaged in the selection, award and administration of Federal grant contracts. Cause and Effect: The Town was in the process of adopting internal control policies but did not have them completed at June 30, 2024. Repeat Finding: Yes Recommendation: We recommend that the Town of Dayton develop and adopt a written Procurement, Suspension and Debarment Policy. Response: Please see the last page of this report for the Town's response to this finding.
2024-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the Trust is the procurement standards under 2 CFR sections 200.318 through 200.326. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Trust does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The Trust has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the Trust’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • Bonding requirements • Contract provisions • Subrecipient and contractor determinations • Retention requirements for records Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the Trust’s procurement policy appropriately. This would include adding any missing components to the Trust’s current procurement policy and updating definitions of types of procurement, i.e., micro-purchases, small purchases, and small acquisition threshold, to match the language used in the Uniform Guidance procurement standards.
2024-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the Trust is the procurement standards under 2 CFR sections 200.318 through 200.326. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Trust does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The Trust has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the Trust’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • Bonding requirements • Contract provisions • Subrecipient and contractor determinations • Retention requirements for records Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the Trust’s procurement policy appropriately. This would include adding any missing components to the Trust’s current procurement policy and updating definitions of types of procurement, i.e., micro-purchases, small purchases, and small acquisition threshold, to match the language used in the Uniform Guidance procurement standards.
2024-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the Trust is the procurement standards under 2 CFR sections 200.318 through 200.326. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Trust does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The Trust has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the Trust’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • Bonding requirements • Contract provisions • Subrecipient and contractor determinations • Retention requirements for records Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the Trust’s procurement policy appropriately. This would include adding any missing components to the Trust’s current procurement policy and updating definitions of types of procurement, i.e., micro-purchases, small purchases, and small acquisition threshold, to match the language used in the Uniform Guidance procurement standards.
2024-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the Trust is the procurement standards under 2 CFR sections 200.318 through 200.326. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Trust does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The Trust has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the Trust’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • Bonding requirements • Contract provisions • Subrecipient and contractor determinations • Retention requirements for records Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the Trust’s procurement policy appropriately. This would include adding any missing components to the Trust’s current procurement policy and updating definitions of types of procurement, i.e., micro-purchases, small purchases, and small acquisition threshold, to match the language used in the Uniform Guidance procurement standards.
2024-005 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, and Special Milk Program for Children CFDA No. 10.553, 10.555, and 10.556) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and reverification of use of same vendors as previous year, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. They are however, checking the status of any new vendors. In addition, the District does not have any procedures in place to verify purchases against the bidding documents for pricing. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. The District could also be overpaying for goods as the bid documentation is not being verified against the purchases made. Questioned Costs: None Perspective Information: As part of required follow up of prior year audit findings, a review of vendors charged to the school lunch fund and therefore represent purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. As part of the current Child Nutrition testing, certain vendors were tested with their purchases being agreed back to the bidding documentation obtained. Some instances, the items were not listed on the bidding documentation or the prices paid were higher than the bid price. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. The District should also implement procedures to verify their purchases against bidding documentation to ensure that they are paying the correct, bid upon price for their purchases. Views of the Responsible Officials and Planned Corrective Actions: The District will monitor vendors to ensure they are able to accept federal monies.
2024-005 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, and Special Milk Program for Children CFDA No. 10.553, 10.555, and 10.556) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and reverification of use of same vendors as previous year, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. They are however, checking the status of any new vendors. In addition, the District does not have any procedures in place to verify purchases against the bidding documents for pricing. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. The District could also be overpaying for goods as the bid documentation is not being verified against the purchases made. Questioned Costs: None Perspective Information: As part of required follow up of prior year audit findings, a review of vendors charged to the school lunch fund and therefore represent purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. As part of the current Child Nutrition testing, certain vendors were tested with their purchases being agreed back to the bidding documentation obtained. Some instances, the items were not listed on the bidding documentation or the prices paid were higher than the bid price. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. The District should also implement procedures to verify their purchases against bidding documentation to ensure that they are paying the correct, bid upon price for their purchases. Views of the Responsible Officials and Planned Corrective Actions: The District will monitor vendors to ensure they are able to accept federal monies.
2024-005 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, and Special Milk Program for Children CFDA No. 10.553, 10.555, and 10.556) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and reverification of use of same vendors as previous year, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. They are however, checking the status of any new vendors. In addition, the District does not have any procedures in place to verify purchases against the bidding documents for pricing. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. The District could also be overpaying for goods as the bid documentation is not being verified against the purchases made. Questioned Costs: None Perspective Information: As part of required follow up of prior year audit findings, a review of vendors charged to the school lunch fund and therefore represent purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. As part of the current Child Nutrition testing, certain vendors were tested with their purchases being agreed back to the bidding documentation obtained. Some instances, the items were not listed on the bidding documentation or the prices paid were higher than the bid price. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. The District should also implement procedures to verify their purchases against bidding documentation to ensure that they are paying the correct, bid upon price for their purchases. Views of the Responsible Officials and Planned Corrective Actions: The District will monitor vendors to ensure they are able to accept federal monies.
2024-005 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, and Special Milk Program for Children CFDA No. 10.553, 10.555, and 10.556) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and reverification of use of same vendors as previous year, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. They are however, checking the status of any new vendors. In addition, the District does not have any procedures in place to verify purchases against the bidding documents for pricing. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. The District could also be overpaying for goods as the bid documentation is not being verified against the purchases made. Questioned Costs: None Perspective Information: As part of required follow up of prior year audit findings, a review of vendors charged to the school lunch fund and therefore represent purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. As part of the current Child Nutrition testing, certain vendors were tested with their purchases being agreed back to the bidding documentation obtained. Some instances, the items were not listed on the bidding documentation or the prices paid were higher than the bid price. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. The District should also implement procedures to verify their purchases against bidding documentation to ensure that they are paying the correct, bid upon price for their purchases. Views of the Responsible Officials and Planned Corrective Actions: The District will monitor vendors to ensure they are able to accept federal monies.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – FEDERAL ALN 10.553 AND 10.559 2024-001 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires Independent School District No. 719, Prior Lake-Savage Area Schools (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the child nutrition cluster federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place within its child nutrition cluster federal programs to ensure compliance with federal requirements relating to assuring that the District was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – Not applicable. Context – The District’s internal controls required the District to review for compliance with suspension and debarment requirements on an annual basis. The District should also be reviewing for compliance with suspension and debarment requirements any time the District adds a new vendor. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel. Effect – Noncompliance with suspension and debarment requirements could result in the District expending federal funds inappropriately or utilized vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures relating to suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance for this area should include documentation of compliance with Uniform Guidance requirements related to suspension and debarment. These controls should also include steps to ensure any vendor with which the District contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District will review procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – FEDERAL ALN 10.553 AND 10.559 2024-001 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires Independent School District No. 719, Prior Lake-Savage Area Schools (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the child nutrition cluster federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place within its child nutrition cluster federal programs to ensure compliance with federal requirements relating to assuring that the District was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – Not applicable. Context – The District’s internal controls required the District to review for compliance with suspension and debarment requirements on an annual basis. The District should also be reviewing for compliance with suspension and debarment requirements any time the District adds a new vendor. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel. Effect – Noncompliance with suspension and debarment requirements could result in the District expending federal funds inappropriately or utilized vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures relating to suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance for this area should include documentation of compliance with Uniform Guidance requirements related to suspension and debarment. These controls should also include steps to ensure any vendor with which the District contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District will review procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
2024-003: Procurement Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 10.760, U. S Department of Agriculture - Water and waste disposal systems for rural communities Federal Award Identification Number and Year: RD Loan 92-12 Loan Period 9/6/23 - 9/1/2063, RD Loan 10 Loan and RD Loan 13 Loan period 1/1/24 - 1/1/2064 Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.318 (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. In addition, per 2 CFR 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement. Condition: The Village did not utilize federal procurement requirements cited above for the engineering services for the Water and Sewer Fund project. Identification of How Likely Questioned Costs Were Computed: The questioned costs were determined from actual engineering design and construction cost billed (federal portion) during the July 6, 2018 through June 30, 2024 period as summarized from the request for disbursement of funds submitted. Known Questioned Costs: $562,676 Context: We tested the procurement of three contracts and identified one contract that did not follow federal procurement requirements. Cause/Effect: The Village's controls were not adequate to ensure it followed the federal requirement for procurement process. As a results, there was one instance of noncompliance related to procurements. Recommendation: We recommend the Village follow federal procurement as required in 2 CFR 200.319 (d) for all contracts reimbursed with federal funds. View of responsible officials and planned corrective action plan: See attached corrective action plan.
2024-002 WRITTEN POLICIES REQUIRED BY UNIFORM GRANT GUIDANCE Programs: Assistance to Firefighters Grants; U.S. Department of Homeland Security; ALN 97.044 Airport Improvement Program; U.S. Department of Transportation; ALN 20.106; All Award Numbers Condition: The City has not adopted federal policies as required by the Uniform Guidance (2 CFR Part 200). Key policies, including, but not limited to, procurement, subrecipient monitoring, and financial management, have not been implemented in accordance with federal standards. Criteria: Uniform Guidance mandates that entities expending federal awards comply with federal policies and procedures to ensure proper management and accountability of federal funds. Specifically, 2 CFR 200.302(b) and 200.318 require entities to implement adequate financial and procurement management systems. Cause: The City lacks formal processes to update and align its internal policies with Uniform Guidance requirements, leading to gaps in federally compliant procedures. Effect: Noncompliance with the Uniform Guidance could result in improper use or oversight of federal funds, increasing the risk of audit findings, potential disallowed costs, and jeopardizing future federal funding. Questioned Costs: No costs were required to be questioned as a result of this finding inasmuch as our testing did not reveal any unallowable costs or excess cash draws. Recommendation: Management should establish and implement federal-compliant policies, specifically focusing on procurement, financial management, and subrecipient monitoring, to ensure full alignment with Uniform Guidance requirements. Periodic policy reviews should be conducted to ensure continued compliance. View of Responsible Officials: Management agrees with the finding and will create appropriate policies and procedures to alleviate the finding from re-occurring.
2024-002 WRITTEN POLICIES REQUIRED BY UNIFORM GRANT GUIDANCE Programs: Assistance to Firefighters Grants; U.S. Department of Homeland Security; ALN 97.044 Airport Improvement Program; U.S. Department of Transportation; ALN 20.106; All Award Numbers Condition: The City has not adopted federal policies as required by the Uniform Guidance (2 CFR Part 200). Key policies, including, but not limited to, procurement, subrecipient monitoring, and financial management, have not been implemented in accordance with federal standards. Criteria: Uniform Guidance mandates that entities expending federal awards comply with federal policies and procedures to ensure proper management and accountability of federal funds. Specifically, 2 CFR 200.302(b) and 200.318 require entities to implement adequate financial and procurement management systems. Cause: The City lacks formal processes to update and align its internal policies with Uniform Guidance requirements, leading to gaps in federally compliant procedures. Effect: Noncompliance with the Uniform Guidance could result in improper use or oversight of federal funds, increasing the risk of audit findings, potential disallowed costs, and jeopardizing future federal funding. Questioned Costs: No costs were required to be questioned as a result of this finding inasmuch as our testing did not reveal any unallowable costs or excess cash draws. Recommendation: Management should establish and implement federal-compliant policies, specifically focusing on procurement, financial management, and subrecipient monitoring, to ensure full alignment with Uniform Guidance requirements. Periodic policy reviews should be conducted to ensure continued compliance. View of Responsible Officials: Management agrees with the finding and will create appropriate policies and procedures to alleviate the finding from re-occurring.
2024-002 WRITTEN POLICIES REQUIRED BY UNIFORM GRANT GUIDANCE Programs: Assistance to Firefighters Grants; U.S. Department of Homeland Security; ALN 97.044 Airport Improvement Program; U.S. Department of Transportation; ALN 20.106; All Award Numbers Condition: The City has not adopted federal policies as required by the Uniform Guidance (2 CFR Part 200). Key policies, including, but not limited to, procurement, subrecipient monitoring, and financial management, have not been implemented in accordance with federal standards. Criteria: Uniform Guidance mandates that entities expending federal awards comply with federal policies and procedures to ensure proper management and accountability of federal funds. Specifically, 2 CFR 200.302(b) and 200.318 require entities to implement adequate financial and procurement management systems. Cause: The City lacks formal processes to update and align its internal policies with Uniform Guidance requirements, leading to gaps in federally compliant procedures. Effect: Noncompliance with the Uniform Guidance could result in improper use or oversight of federal funds, increasing the risk of audit findings, potential disallowed costs, and jeopardizing future federal funding. Questioned Costs: No costs were required to be questioned as a result of this finding inasmuch as our testing did not reveal any unallowable costs or excess cash draws. Recommendation: Management should establish and implement federal-compliant policies, specifically focusing on procurement, financial management, and subrecipient monitoring, to ensure full alignment with Uniform Guidance requirements. Periodic policy reviews should be conducted to ensure continued compliance. View of Responsible Officials: Management agrees with the finding and will create appropriate policies and procedures to alleviate the finding from re-occurring.
2024-003: Suspension and Debarment—Material Weakness U.S. Department of Agriculture Passed through Missouri Department of Elementary and Secondary Education Child Nutrition Cluster, Assistance Listing No. 10.555 (National School Lunch Program), 10.553 (School Breakfast Program), 10.582 (Fresh Fruit and Vegetable Program) Federal award year 2023-2024 Criteria: The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance retirements. Also, the Uniform Guidance (2 CFR 200.212 and 200.318(h)) stipulates that when a nonfederal entity enters into a contract or purchase with an entity (vendor or subrecipient), the nonfederal entity must verify the entity is not suspended or debarred from participation in federal programs/grants when expending $25,000 or more in a year. Condition: The District did not have controls in place to reasonably ensure any entity receiving more than $25,000 in federal grant funds was not suspended or debarred, prior to providing them with federal funds. Cause: A lack of controls to reasonably ensure this verification was performed. Effect or potential effect: The District did not have controls in place to reasonably ensure compliance with suspension and debarment requirements of the Uniform Guidance. The potential effect is submitting unallowable costs, or loss of federal funding. Questioned costs: None Context: For all sample selections tested in the major program, documentation was not maintained that could provide evidence that the District had performed the required verification. None of the samples tested were identified as suspended or debarred entities. Identification as a repeat finding, if applicable: Not applicable. Recommendation: We recommend the District develop proper controls and procedures to determine whether vendors have been suspended or debarred prior to entering into contracts or purchase orders for all transactions, and maintain documentation supporting this verification. View of responsible officials: Management agrees with this finding.
2024-003: Suspension and Debarment—Material Weakness U.S. Department of Agriculture Passed through Missouri Department of Elementary and Secondary Education Child Nutrition Cluster, Assistance Listing No. 10.555 (National School Lunch Program), 10.553 (School Breakfast Program), 10.582 (Fresh Fruit and Vegetable Program) Federal award year 2023-2024 Criteria: The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance retirements. Also, the Uniform Guidance (2 CFR 200.212 and 200.318(h)) stipulates that when a nonfederal entity enters into a contract or purchase with an entity (vendor or subrecipient), the nonfederal entity must verify the entity is not suspended or debarred from participation in federal programs/grants when expending $25,000 or more in a year. Condition: The District did not have controls in place to reasonably ensure any entity receiving more than $25,000 in federal grant funds was not suspended or debarred, prior to providing them with federal funds. Cause: A lack of controls to reasonably ensure this verification was performed. Effect or potential effect: The District did not have controls in place to reasonably ensure compliance with suspension and debarment requirements of the Uniform Guidance. The potential effect is submitting unallowable costs, or loss of federal funding. Questioned costs: None Context: For all sample selections tested in the major program, documentation was not maintained that could provide evidence that the District had performed the required verification. None of the samples tested were identified as suspended or debarred entities. Identification as a repeat finding, if applicable: Not applicable. Recommendation: We recommend the District develop proper controls and procedures to determine whether vendors have been suspended or debarred prior to entering into contracts or purchase orders for all transactions, and maintain documentation supporting this verification. View of responsible officials: Management agrees with this finding.
2024-003: Suspension and Debarment—Material Weakness U.S. Department of Agriculture Passed through Missouri Department of Elementary and Secondary Education Child Nutrition Cluster, Assistance Listing No. 10.555 (National School Lunch Program), 10.553 (School Breakfast Program), 10.582 (Fresh Fruit and Vegetable Program) Federal award year 2023-2024 Criteria: The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance retirements. Also, the Uniform Guidance (2 CFR 200.212 and 200.318(h)) stipulates that when a nonfederal entity enters into a contract or purchase with an entity (vendor or subrecipient), the nonfederal entity must verify the entity is not suspended or debarred from participation in federal programs/grants when expending $25,000 or more in a year. Condition: The District did not have controls in place to reasonably ensure any entity receiving more than $25,000 in federal grant funds was not suspended or debarred, prior to providing them with federal funds. Cause: A lack of controls to reasonably ensure this verification was performed. Effect or potential effect: The District did not have controls in place to reasonably ensure compliance with suspension and debarment requirements of the Uniform Guidance. The potential effect is submitting unallowable costs, or loss of federal funding. Questioned costs: None Context: For all sample selections tested in the major program, documentation was not maintained that could provide evidence that the District had performed the required verification. None of the samples tested were identified as suspended or debarred entities. Identification as a repeat finding, if applicable: Not applicable. Recommendation: We recommend the District develop proper controls and procedures to determine whether vendors have been suspended or debarred prior to entering into contracts or purchase orders for all transactions, and maintain documentation supporting this verification. View of responsible officials: Management agrees with this finding.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster – Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023, FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . .” 2 CFR 200.320 states in part: “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 following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . “ 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. The School Corporation’s policy states that the small purchase threshold is between $10,000 and $150,000. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2023, two vendors, totaling $109,657 and $53,441, were selected for testing at the small purchase threshold. The School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. During the audit period, there were ten vendors identified which exceeded $25,000 in disbursements on an annual basis. Six vendors were selected for testing. In one instance, the School Corporation’s contract with the vendor did not include any suspension and debarment clause and the School Corporation did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance was systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include documenting the procurement process taken by management for transactions with vendors exceeding the simplified acquisition and small purchase thresholds. When utilizing vendors providing specialized services, documentation should be prepared and maintained by management to support sole source procurement decisions when competitive is limited due to the nature of the service. We also recommend implement an annual control to review and document suspension and debarment checks for all vendors funded with Child Nutrition Cluster grant funds that meet the covered transaction threshold of $25,000. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster – Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023, FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . .” 2 CFR 200.320 states in part: “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 following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . “ 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. The School Corporation’s policy states that the small purchase threshold is between $10,000 and $150,000. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2023, two vendors, totaling $109,657 and $53,441, were selected for testing at the small purchase threshold. The School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. During the audit period, there were ten vendors identified which exceeded $25,000 in disbursements on an annual basis. Six vendors were selected for testing. In one instance, the School Corporation’s contract with the vendor did not include any suspension and debarment clause and the School Corporation did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance was systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include documenting the procurement process taken by management for transactions with vendors exceeding the simplified acquisition and small purchase thresholds. When utilizing vendors providing specialized services, documentation should be prepared and maintained by management to support sole source procurement decisions when competitive is limited due to the nature of the service. We also recommend implement an annual control to review and document suspension and debarment checks for all vendors funded with Child Nutrition Cluster grant funds that meet the covered transaction threshold of $25,000. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster – Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023, FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . .” 2 CFR 200.320 states in part: “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 following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . “ 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. The School Corporation’s policy states that the small purchase threshold is between $10,000 and $150,000. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2023, two vendors, totaling $109,657 and $53,441, were selected for testing at the small purchase threshold. The School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. During the audit period, there were ten vendors identified which exceeded $25,000 in disbursements on an annual basis. Six vendors were selected for testing. In one instance, the School Corporation’s contract with the vendor did not include any suspension and debarment clause and the School Corporation did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance was systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include documenting the procurement process taken by management for transactions with vendors exceeding the simplified acquisition and small purchase thresholds. When utilizing vendors providing specialized services, documentation should be prepared and maintained by management to support sole source procurement decisions when competitive is limited due to the nature of the service. We also recommend implement an annual control to review and document suspension and debarment checks for all vendors funded with Child Nutrition Cluster grant funds that meet the covered transaction threshold of $25,000. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster – Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023, FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . .” 2 CFR 200.320 states in part: “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 following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . “ 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. The School Corporation’s policy states that the small purchase threshold is between $10,000 and $150,000. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2023, two vendors, totaling $109,657 and $53,441, were selected for testing at the small purchase threshold. The School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. During the audit period, there were ten vendors identified which exceeded $25,000 in disbursements on an annual basis. Six vendors were selected for testing. In one instance, the School Corporation’s contract with the vendor did not include any suspension and debarment clause and the School Corporation did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance was systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include documenting the procurement process taken by management for transactions with vendors exceeding the simplified acquisition and small purchase thresholds. When utilizing vendors providing specialized services, documentation should be prepared and maintained by management to support sole source procurement decisions when competitive is limited due to the nature of the service. We also recommend implement an annual control to review and document suspension and debarment checks for all vendors funded with Child Nutrition Cluster grant funds that meet the covered transaction threshold of $25,000. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Reference Number: 2024-003 Description: Written Procedures Condition and Criteria: At the beginning of the audit period, the District did not have a Federal Funds Manual in place to document policies and procedures for managing federal awards in compliance 2 CFR 200, Subparts D and E. The Uniform Guidance requires the following written procedures: Written procedures for grant financial management (2 CFR 200.302 and 2 CFR 200.305) Written procurement policy (2 CFR 200.318a) Written procedures for allowable costs (2 CFR 200.403) Written procedures for managing and safeguarding property or equipment acquired with federal funds (2 CFR 200.313) During the course of the audit, the District developed and implemented a Federal Funds Manual to address this deficiency. Cause: There was an administrative oversight of ensuring the District had these written procedures in place. Effect: The absence of a documented Federal Funds Manual increased the risk of noncompliance with federal requirements and ineffective management of federal funds. However, the district’s subsequent implementation of the manual before the audit’s completion reduced this risk. Recommendation: We recommend that the District continue to utilize and periodically review the Federal Funds Manual to ensure it remains comprehensive and up-to-date with changes in federal requirements. Views of Responsible Officials and Corrective Action: See Corrective Action Plan.
Reference Number: 2024-003 Description: Written Procedures Condition and Criteria: At the beginning of the audit period, the District did not have a Federal Funds Manual in place to document policies and procedures for managing federal awards in compliance 2 CFR 200, Subparts D and E. The Uniform Guidance requires the following written procedures: Written procedures for grant financial management (2 CFR 200.302 and 2 CFR 200.305) Written procurement policy (2 CFR 200.318a) Written procedures for allowable costs (2 CFR 200.403) Written procedures for managing and safeguarding property or equipment acquired with federal funds (2 CFR 200.313) During the course of the audit, the District developed and implemented a Federal Funds Manual to address this deficiency. Cause: There was an administrative oversight of ensuring the District had these written procedures in place. Effect: The absence of a documented Federal Funds Manual increased the risk of noncompliance with federal requirements and ineffective management of federal funds. However, the district’s subsequent implementation of the manual before the audit’s completion reduced this risk. Recommendation: We recommend that the District continue to utilize and periodically review the Federal Funds Manual to ensure it remains comprehensive and up-to-date with changes in federal requirements. Views of Responsible Officials and Corrective Action: See Corrective Action Plan.
Reference Number: 2024-003 Description: Written Procedures Condition and Criteria: At the beginning of the audit period, the District did not have a Federal Funds Manual in place to document policies and procedures for managing federal awards in compliance 2 CFR 200, Subparts D and E. The Uniform Guidance requires the following written procedures: Written procedures for grant financial management (2 CFR 200.302 and 2 CFR 200.305) Written procurement policy (2 CFR 200.318a) Written procedures for allowable costs (2 CFR 200.403) Written procedures for managing and safeguarding property or equipment acquired with federal funds (2 CFR 200.313) During the course of the audit, the District developed and implemented a Federal Funds Manual to address this deficiency. Cause: There was an administrative oversight of ensuring the District had these written procedures in place. Effect: The absence of a documented Federal Funds Manual increased the risk of noncompliance with federal requirements and ineffective management of federal funds. However, the district’s subsequent implementation of the manual before the audit’s completion reduced this risk. Recommendation: We recommend that the District continue to utilize and periodically review the Federal Funds Manual to ensure it remains comprehensive and up-to-date with changes in federal requirements. Views of Responsible Officials and Corrective Action: See Corrective Action Plan.
2024 – 002 – Procurement Grantor: Department of Health and Human Services Passthrough Agency: N/A Program Name: Community Project Funding/Congressionally Directed Spending - Construction Award Name: Congressional Directives Award Year: 2024 Award Number: 6 CE1HS47194-01-10 Assistance Listing Number: 93.493 Criteria 2 CFR 200.318(i) stipulates that non-Federal entities 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. Condition The Alliance’s Procurement policy states that bidding is required for expenditures greater than $5,000. A minimum of two bids are required for any expenditures between $5,000 and $50,000 and a minimum of three bids are required for any expenditures greater than $50,000. The policy states that any purchase transactions above $25,000 are required to be approved by the head of the department. For two of the five samples selected for testing, the Alliance received the appropriate bids, but did not retain adequate documentation to support the basis for selecting the contractor. The Alliance did not retain documentation that the cost or price analysis was performed. Cause For the two samples, the individual completing the contractor selection process did not have the appropriate understanding that the basis for selecting the contractor was required to be formally documented or that the cost or price analysis was required to be formally documented and maintained. Effect Although the procurement policy was followed regarding the bidding process, no documentation was retained for the rationale regarding the selection of the contractor. Therefore, the Alliance was not in compliance with policy. Questioned Costs None noted. Recommendation The Alliance should implement training and communication to enforce their procurement policy over the bidding process including maintaining documentation of the decision between competing bids. Management’s Views and Corrective Action Plan Please refer to the Alliance’s Management’s Views and Corrective Action Plan included at the end of this report for additional details.
FINDING 2024-005 Information on the federal program: Subject: Special Education Cluster (IDEA) – Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): H027A210084, H027A220084, H027A230084 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 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.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School District to ensure compliance with requirements related to the Special Education Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School District's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School District at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There we no questioned costs identified. Context: During the audit period, the School District purchased Special Education contracted services from one specialist with aggregate payments for each fiscal year which were within the small purchases threshold ($10,000 - $150,000) under Federal and State procurement regulations. The School District did not solicit multiple quotes for services, document the method and rationale for procurement, and did not perform a check to confirm the service provider was not suspended or debarred before entering into the contract and disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School District enter into a written contract with service providers funded by federal grants. The contract should include a Suspension and Debarment clause or certification on an annual basis. We also recommend the School District follow their procurement policy for small purchase thresholds, including documenting procurement rationale and suspension and debarment checks prior to entering into the covered transaction funded by federal grants. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-005 Information on the federal program: Subject: Special Education Cluster (IDEA) – Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): H027A210084, H027A220084, H027A230084 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 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.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School District to ensure compliance with requirements related to the Special Education Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School District's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School District at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There we no questioned costs identified. Context: During the audit period, the School District purchased Special Education contracted services from one specialist with aggregate payments for each fiscal year which were within the small purchases threshold ($10,000 - $150,000) under Federal and State procurement regulations. The School District did not solicit multiple quotes for services, document the method and rationale for procurement, and did not perform a check to confirm the service provider was not suspended or debarred before entering into the contract and disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School District enter into a written contract with service providers funded by federal grants. The contract should include a Suspension and Debarment clause or certification on an annual basis. We also recommend the School District follow their procurement policy for small purchase thresholds, including documenting procurement rationale and suspension and debarment checks prior to entering into the covered transaction funded by federal grants. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-005 Information on the federal program: Subject: Special Education Cluster (IDEA) – Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): H027A210084, H027A220084, H027A230084 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.318 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.” and 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School District to ensure compliance with requirements related to the Special Education Cluster and Procurement and Suspension and Debarment compliance requirements. Cause: The School District's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School District at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There we no questioned costs identified. Context: During the audit period, the School District purchased Special Education contracted services from one specialist with aggregate payments for each fiscal year which were within the small purchases threshold ($10,000 - $150,000) under Federal and State procurement regulations. The School District did not solicit multiple quotes for services, document the method and rationale for procurement, and did not perform a check to confirm the service provider was not suspended or debarred before entering into the contract and disbursing federal funds. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the School District enter into a written contract with service providers funded by federal grants. The contract should include a Suspension and Debarment clause or certification on an annual basis. We also recommend the School District follow their procurement policy for small purchase thresholds, including documenting procurement rationale and suspension and debarment checks prior to entering into the covered transaction funded by federal grants. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Identification Number and Year: 24UT311N1099 - 2024 Pass-Through Agency: Colorado Department of Education Pass-Through Numbers: 4553, 4555, 4559, 6555 Award Period: July 1, 2023 – June 30, 2024 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. This procurement process must be documented with proper supporting documentation. Condition: We noted that the District does have policies and procedures in place for compliance with procurement requirements. However, we noted one out of eight vendors did not have an updated sole source justification form on file covering the current fiscal year. Questioned costs: None Context: One vendor, out of a sample of eight, did not have an updated sole source justification form covering the current fiscal year. Cause: The District’s approval of sole source justification forms is typically valid for the life of the business with the vendor, but this one instance had an expiration date on the approval of the vendor as a sole source that ended prior to the current fiscal year. An updated sole source justification from was not completed after the expiration of the previous approval. Effect: Failure to document the procurement process exposes the District to the risk that the District’s procurement policy was not followed before the contracts were awarded. Repeat Finding: NoRecommendation: We recommend the District review their controls and procedures surrounding procurement to ensure their purchasing policy is followed. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Identification Number and Year: 24UT311N1099 - 2024 Pass-Through Agency: Colorado Department of Education Pass-Through Numbers: 4553, 4555, 4559, 6555 Award Period: July 1, 2023 – June 30, 2024 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. This procurement process must be documented with proper supporting documentation. Condition: We noted that the District does have policies and procedures in place for compliance with procurement requirements. However, we noted one out of eight vendors did not have an updated sole source justification form on file covering the current fiscal year. Questioned costs: None Context: One vendor, out of a sample of eight, did not have an updated sole source justification form covering the current fiscal year. Cause: The District’s approval of sole source justification forms is typically valid for the life of the business with the vendor, but this one instance had an expiration date on the approval of the vendor as a sole source that ended prior to the current fiscal year. An updated sole source justification from was not completed after the expiration of the previous approval. Effect: Failure to document the procurement process exposes the District to the risk that the District’s procurement policy was not followed before the contracts were awarded. Repeat Finding: NoRecommendation: We recommend the District review their controls and procedures surrounding procurement to ensure their purchasing policy is followed. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Identification Number and Year: 24UT311N1099 - 2024 Pass-Through Agency: Colorado Department of Education Pass-Through Numbers: 4553, 4555, 4559, 6555 Award Period: July 1, 2023 – June 30, 2024 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. This procurement process must be documented with proper supporting documentation. Condition: We noted that the District does have policies and procedures in place for compliance with procurement requirements. However, we noted one out of eight vendors did not have an updated sole source justification form on file covering the current fiscal year. Questioned costs: None Context: One vendor, out of a sample of eight, did not have an updated sole source justification form covering the current fiscal year. Cause: The District’s approval of sole source justification forms is typically valid for the life of the business with the vendor, but this one instance had an expiration date on the approval of the vendor as a sole source that ended prior to the current fiscal year. An updated sole source justification from was not completed after the expiration of the previous approval. Effect: Failure to document the procurement process exposes the District to the risk that the District’s procurement policy was not followed before the contracts were awarded. Repeat Finding: NoRecommendation: We recommend the District review their controls and procedures surrounding procurement to ensure their purchasing policy is followed. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Identification Number and Year: 24UT311N1099 - 2024 Pass-Through Agency: Colorado Department of Education Pass-Through Numbers: 4553, 4555, 4559, 6555 Award Period: July 1, 2023 – June 30, 2024 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. This procurement process must be documented with proper supporting documentation. Condition: We noted that the District does have policies and procedures in place for compliance with procurement requirements. However, we noted one out of eight vendors did not have an updated sole source justification form on file covering the current fiscal year. Questioned costs: None Context: One vendor, out of a sample of eight, did not have an updated sole source justification form covering the current fiscal year. Cause: The District’s approval of sole source justification forms is typically valid for the life of the business with the vendor, but this one instance had an expiration date on the approval of the vendor as a sole source that ended prior to the current fiscal year. An updated sole source justification from was not completed after the expiration of the previous approval. Effect: Failure to document the procurement process exposes the District to the risk that the District’s procurement policy was not followed before the contracts were awarded. Repeat Finding: NoRecommendation: We recommend the District review their controls and procedures surrounding procurement to ensure their purchasing policy is followed. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Identification Number and Year: 24UT311N1099 - 2024 Pass-Through Agency: Colorado Department of Education Pass-Through Numbers: 4553, 4555, 4559, 6555 Award Period: July 1, 2023 – June 30, 2024 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. This procurement process must be documented with proper supporting documentation. Condition: We noted that the District does have policies and procedures in place for compliance with procurement requirements. However, we noted one out of eight vendors did not have an updated sole source justification form on file covering the current fiscal year. Questioned costs: None Context: One vendor, out of a sample of eight, did not have an updated sole source justification form covering the current fiscal year. Cause: The District’s approval of sole source justification forms is typically valid for the life of the business with the vendor, but this one instance had an expiration date on the approval of the vendor as a sole source that ended prior to the current fiscal year. An updated sole source justification from was not completed after the expiration of the previous approval. Effect: Failure to document the procurement process exposes the District to the risk that the District’s procurement policy was not followed before the contracts were awarded. Repeat Finding: NoRecommendation: We recommend the District review their controls and procedures surrounding procurement to ensure their purchasing policy is followed. Views of responsible officials: There is no disagreement with the audit finding.
U.S. Department of Education passed through State of Utah Board of Education 2024-001 Procurement and Suspension and Debarment Program Name of Federal Program (Assistance Listing Number): Substance Abuse and Mental Health Services Projects of Regional and National Significance (93.243) Criteria: Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients “must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price” 2 CFR section 200.318(i). The District’s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The District also has procedures to identify procurement transactions requiring competitive bids or proposals. Context and Condition: We selected six contracts to test for compliance with procurement standards. Records for four contracts lacked documentation sufficient to detail procurement history. Cause: The District did not follow its documentation policy for obtaining contracts or bids. Effect: A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs: No costs were questionable Recommendation: We recommend the District ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials: The District will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Federal Agency: Department of Health and Human Services Federal Program: Certified Community Behavioral Health Clinic, ALN No. 93.696, Award Period 9/30/2023 – 9/29/2027 Compliance Requirement: Procurement, Suspension and Debarment Repeat Finding: No Condition: KANZA’s procurement policy that adhered to the Uniform Guidance was not implemented until June 2024. This was after procurement decisions were made that were funded by this grant. During our testing of five covered transactions (all vendors), we noted that management was not able to provide supporting documentation that suspension and debarment procedures were performed before the start of the procurement activity. Questioned Costs: None Context: For five of the five vendors tested for suspension and debarment, management was not able to provide the required supporting documentation. KANZA confirmed that the SAM check had been done but the documentation was not maintained at the time of the check. Criteria: Per 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements (Uniform Guidance), Section 200.318 General Procurement Standards, the non-Federal entity must maintain records sufficient to detail the history of procurement and this procurement activity must be supported with a procurement policy. Also, 2 CFR 180.300 prohibits entities from contracting under covered transactions to parties that are suspended or debarred from doing business with the federal government. A contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. In order to comply with federal suspension and debarment requirements, KANZA can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. Cause: The grant was new to KANZA in fiscal year 2024 and requirements were not communicated to KANZA by the grantor. Effect: The finding indicates that there could be some process improvements in how contracts are reviewed, documented and maintained to provide evidence the compliance requirements are being met. Recommendation: We understand that the procurement policy is now implemented. We recommend that KANZA either obtain certifications from vendors stating their organization is not suspended, debarred, or otherwise excluded from participation in federal assistance programs or document the procedures performed to verify the vendor is not identified as suspended or debarred on the SAM website. We recommend that KANZA has proper procedures in place to ensure that all contractual documentation is maintained and able to be located. Management’s Response/Corrective Action Plan (Unaudited): At this time, the administrator(s)/staff member(s) tasked with executing the grant requirements at KANZA will more effectively document standard purchasing procedures and the additional requirements applicable to procurements that are subject to the federal Uniform Guidance regulations concerning the use of federal funds. Planned Completion Date: The procedures will be implemented on or before January 1, 2025. Contact Person Responsible for Correction Action: Shelby Donahoo, Director of Finance
Finding 2024-002 – Procurement, Suspension, and Debarment Identification of the federal program: Federal Grantor: United States Department of Health and Human Services Assistance Listing No.: 93.493, Congressional Directives Federal Award Number: 1 CE1HS52357‐01‐00 Federal Award Period of Performance: 09/30/2023–09/29/2026 Criteria or specific requirement (including statutory, regulatory, or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: Procurement policies required by 2 CFR 200.318-326 were not formally documented. Documentation was not consistently retained evidencing the review and approval of new vendors for suspension and debarment prior to adding them into PeopleSoft, CFNI’s vendor management platform. Management represented that they performed a monthly reconciliation of the number of vendors screened and the number of vendors submitted to the third-party, however, management did not retain evidence of the reviews in fiscal year 2024. CFNI’s third-party contractor for suspension and debarment does not have a SOC 1 (System and Organization Controls Report) report that covers the controls over suspension and debarment services provided. Management did not perform testing over the results of the third-party contractor to assess the accuracy of its procedures. Effect or potential effect: Suspension and debarment results provided by the third-party contractor may not be accurate. As a result, federal funds may be used to pay a contractor that is suspended or debarred. Questioned costs: None. Context: For three of 40 new vendors sampled during the fiscal year, the documentation evidencing the review of new vendors for suspension and debarment was not retained. For Assistance Listing No. 93.493, the federal portion of procurement expenditures subject to suspension and debarment review totaled $1,441,622, which represents approximately 61.5% of total federal expenditures of $2,341,797 reported in the SEFA for the year ended June 30, 2024. Identification as a repeat finding, if applicable: This is not a repeat finding from the prior year. Recommendation: CFNI should revise its procurement policies to be in compliance with 2 CFR 200.318-326. CFNI should implement procedures to reperform the testing for a sample of vendors from the third-party suspension and debarment results to ensure the accuracy of the results received. CFNI should formalize the documentation of the reconciliation of the number of vendors screened and the number of vendors submitted to the third-party. CFNI should update its policies and procedures over the new vendor setup process to require supporting documentation related to the suspension and debarment search performed be maintained. Views of responsible officials: The audit identified three instances out of 40 sampled where CFNI did not retain documentation verifying that suspension and debarment reviews were conducted during the onboarding of new suppliers. Although CFNI has an established vetting process, it recognizes the need for consistent documentation to evidence compliance. CFNI will implement formalized procedures to ensure all suspension and debarment reviews are documented and retained for audit purposes. CFNI engages a third-party contractor to monitor its supplier list against suspension and debarment databases. While the vendor provided a SOC 1 report, it did not specifically cover the suspension and debarment services provided. Additionally, CFNI did not conduct testing to validate the accuracy of the third-party's results. CFNI will revise its vendor management practices to ensure the SOC 1 reports cover the relevant services, and it will establish testing procedures to confirm the reliability of the vendor's outputs. Although CFNI utilizes two processes to monitor active suppliers against suspension and debarment lists, no reconciliation was documented to confirm that the supplier lists provided to and received from the third party were complete and accurate. Additionally, no testing was conducted to validate the third party’s work. CFNI will implement a reconciliation process to verify the completeness and accuracy of supplier lists before and after third-party reviews. Furthermore, it will establish a sampling and testing procedure to validate the results provided by external vendors.
Finding 2024-001 Procurement Significant Deficiency Federal Program: Charter Schools Program Assistance Listing Numbers: 84.282A Criteria Per 2 CFR 200.318, “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.” Condition The School’s procurement policies do not include wording or procedures to ensure the School is complying with the above standard. Cause A responsible individual is not monitoring Federal regulations to ensure the School’s procurement procedures are properly documented and in line with the regulations. Effect Not documenting these procedures could result in the School completing procurement transactions that are not in compliance with Federal regulations. Recommendation We recommend the School develop a written procurement policy that incorporates the Federal regulations identified above. Views of Responsible Officials The School’s Corrective Action Plan is included on page
Finding 2024-001 Procurement Significant Deficiency Federal Program: Charter Schools Program Assistance Listing Numbers: 84.282A Criteria Per 2 CFR 200.318, “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.” Condition The School’s procurement policies do not include wording or procedures to ensure the School is complying with the above standard. Cause A responsible individual is not monitoring Federal regulations to ensure the School’s procurement procedures are properly documented and in line with the regulations. Effect Not documenting these procedures could result in the School completing procurement transactions that are not in compliance with Federal regulations. Recommendation We recommend the School develop a written procurement policy that incorporates the Federal regulations identified above. Views of Responsible Officials The School’s Corrective Action Plan is included on page
2024 - 006: Procurement Federal Agencies: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster ALN: 10.553, 10.555, 10.556, and 10.559 Federal Award Identification Number and Year: 23MIN061N1199, 2024 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: 1-0112-000 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR section 200.318(i) requires the District to 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. Condition: The District did not retain formal documentation of controls over procurement procedures over covered transactions in the child nutrition program in 2024. Questioned Costs: None Context: Of the covered transactions tested, it was noted that the District did not perform the required control over procurement on 2 of 40 items tested for the child nutrition program. Cause: Although it was determined that compliance requirements were met through corroboration with multiple District staff and contractors as well as confirmation that one of the noted procurements in question was purchased through a group purchasing cooperation, the documentation of related controls was not formally documented or retained. Effect: Without proper controls in place, there is a higher likelihood that District could not be in compliance with federal procurement requirements. Repeat Finding: No Recommendation: We recommend the District ensures it retains all documentation for procurement methods used such as retaining all quotes/bids received, as well as formally documenting rationale for all procurement decisions made. View of Responsible Official: There is no disagreement with the audit finding.
2024 - 006: Procurement Federal Agencies: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster ALN: 10.553, 10.555, 10.556, and 10.559 Federal Award Identification Number and Year: 23MIN061N1199, 2024 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: 1-0112-000 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR section 200.318(i) requires the District to 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. Condition: The District did not retain formal documentation of controls over procurement procedures over covered transactions in the child nutrition program in 2024. Questioned Costs: None Context: Of the covered transactions tested, it was noted that the District did not perform the required control over procurement on 2 of 40 items tested for the child nutrition program. Cause: Although it was determined that compliance requirements were met through corroboration with multiple District staff and contractors as well as confirmation that one of the noted procurements in question was purchased through a group purchasing cooperation, the documentation of related controls was not formally documented or retained. Effect: Without proper controls in place, there is a higher likelihood that District could not be in compliance with federal procurement requirements. Repeat Finding: No Recommendation: We recommend the District ensures it retains all documentation for procurement methods used such as retaining all quotes/bids received, as well as formally documenting rationale for all procurement decisions made. View of Responsible Official: There is no disagreement with the audit finding.
2024 - 006: Procurement Federal Agencies: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster ALN: 10.553, 10.555, 10.556, and 10.559 Federal Award Identification Number and Year: 23MIN061N1199, 2024 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: 1-0112-000 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR section 200.318(i) requires the District to 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. Condition: The District did not retain formal documentation of controls over procurement procedures over covered transactions in the child nutrition program in 2024. Questioned Costs: None Context: Of the covered transactions tested, it was noted that the District did not perform the required control over procurement on 2 of 40 items tested for the child nutrition program. Cause: Although it was determined that compliance requirements were met through corroboration with multiple District staff and contractors as well as confirmation that one of the noted procurements in question was purchased through a group purchasing cooperation, the documentation of related controls was not formally documented or retained. Effect: Without proper controls in place, there is a higher likelihood that District could not be in compliance with federal procurement requirements. Repeat Finding: No Recommendation: We recommend the District ensures it retains all documentation for procurement methods used such as retaining all quotes/bids received, as well as formally documenting rationale for all procurement decisions made. View of Responsible Official: There is no disagreement with the audit finding.
2024 - 006: Procurement Federal Agencies: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster ALN: 10.553, 10.555, 10.556, and 10.559 Federal Award Identification Number and Year: 23MIN061N1199, 2024 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: 1-0112-000 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR section 200.318(i) requires the District to 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. Condition: The District did not retain formal documentation of controls over procurement procedures over covered transactions in the child nutrition program in 2024. Questioned Costs: None Context: Of the covered transactions tested, it was noted that the District did not perform the required control over procurement on 2 of 40 items tested for the child nutrition program. Cause: Although it was determined that compliance requirements were met through corroboration with multiple District staff and contractors as well as confirmation that one of the noted procurements in question was purchased through a group purchasing cooperation, the documentation of related controls was not formally documented or retained. Effect: Without proper controls in place, there is a higher likelihood that District could not be in compliance with federal procurement requirements. Repeat Finding: No Recommendation: We recommend the District ensures it retains all documentation for procurement methods used such as retaining all quotes/bids received, as well as formally documenting rationale for all procurement decisions made. View of Responsible Official: There is no disagreement with the audit finding.
2024 - 006: Procurement Federal Agencies: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster ALN: 10.553, 10.555, 10.556, and 10.559 Federal Award Identification Number and Year: 23MIN061N1199, 2024 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: 1-0112-000 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR section 200.318(i) requires the District to 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. Condition: The District did not retain formal documentation of controls over procurement procedures over covered transactions in the child nutrition program in 2024. Questioned Costs: None Context: Of the covered transactions tested, it was noted that the District did not perform the required control over procurement on 2 of 40 items tested for the child nutrition program. Cause: Although it was determined that compliance requirements were met through corroboration with multiple District staff and contractors as well as confirmation that one of the noted procurements in question was purchased through a group purchasing cooperation, the documentation of related controls was not formally documented or retained. Effect: Without proper controls in place, there is a higher likelihood that District could not be in compliance with federal procurement requirements. Repeat Finding: No Recommendation: We recommend the District ensures it retains all documentation for procurement methods used such as retaining all quotes/bids received, as well as formally documenting rationale for all procurement decisions made. View of Responsible Official: There is no disagreement with the audit finding.
2024 - 006: Procurement Federal Agencies: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster ALN: 10.553, 10.555, 10.556, and 10.559 Federal Award Identification Number and Year: 23MIN061N1199, 2024 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: 1-0112-000 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or Specific Requirement: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR section 200.318(i) requires the District to 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. Condition: The District did not retain formal documentation of controls over procurement procedures over covered transactions in the child nutrition program in 2024. Questioned Costs: None Context: Of the covered transactions tested, it was noted that the District did not perform the required control over procurement on 2 of 40 items tested for the child nutrition program. Cause: Although it was determined that compliance requirements were met through corroboration with multiple District staff and contractors as well as confirmation that one of the noted procurements in question was purchased through a group purchasing cooperation, the documentation of related controls was not formally documented or retained. Effect: Without proper controls in place, there is a higher likelihood that District could not be in compliance with federal procurement requirements. Repeat Finding: No Recommendation: We recommend the District ensures it retains all documentation for procurement methods used such as retaining all quotes/bids received, as well as formally documenting rationale for all procurement decisions made. View of Responsible Official: There is no disagreement with the audit finding.
2024 - 007: Procurement Federal Agency: U.S. Department of Education Federal Program Title: Special Education Cluster ALN: 84.027 and 84.173 Federal Award Identification Numbers and Year: H027A230087 & H173A230086, 2024 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: H027A230087 & H173A230086 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance and Other Matters Criteria or Specific Requirement: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR section 200.318(i) requires the District to 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. Condition: The District did not perform the required control over procurement procedures over covered transactions in the special education program in 2024. Questioned Costs: $19,317 Context: Of the covered transactions tested, it was noted that the District did not perform the required control over procurement on 3 of 3 items tested for the special education program. Cause: District did not retain the proper documentation for the procurement method utilized. Effect: Without proper controls in place, there is a higher likelihood that District could not be in compliance with federal procurement requirements. Repeat Finding: No Recommendation: We recommend the District ensures it retains all documentation for procurement methods used such as retaining all quotes/bids received, as well as formally documenting rationale for all procurement decisions made. View of Responsible Official: There is no disagreement with the audit finding.