Department of Labor, YouthBuild Federal Financial Assistance Listing Number # 17.274, 2020-2023 Department of Treasury, Coronavirus State and Local Fiscal Relief Recover Funds Federal Financial Assistance Listing # 21.027, Awards passed through the Minnesota Department of Human Services and the City of Minneapolis Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Controls Over Compliance and Noncompliance Criteria: Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non‐federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that there was no observable control documentation to directly indicate that a search for price comparisons or suspension and debarment was performed on vendors. Cause: Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect: A lack of established controls increases the overall risk that Organization is contracting and awarding contracts to suspended or debarred vendors or is not obtaining the best possible prices for goods or services. Questioned Costs: None reported. Context/Sampling: For Federal Financial Assistance Listing # 17.274, a nonstatistical sample of 44 transactions out of 220 total transactions were selected for testing. Required documentation related to the price comparison search was not maintained for 14 of the items selected. Required documentation related to the search for suspension and debarment was not maintained for any of the items selected. For Federal Financial Assistance Listing # 21.027 a nonstatistical sample of seven transactions out of 21 total transactions were selected for testing. Required documentation related to the search for suspension and debarment was not maintained for two of the items selected. Repeat Finding from Prior Years: Yes Recommendation: We recommend that management maintain adequate supporting documentation and records to document history and methods of procurement, suspension, and debarment and the procedures performed to comply with these CFR sections. Views of Responsible Officials: Management is in agreement with this finding.
Department of Labor, YouthBuild Federal Financial Assistance Listing Number # 17.274, 2020-2023 Department of Treasury, Coronavirus State and Local Fiscal Relief Recover Funds Federal Financial Assistance Listing # 21.027, Awards passed through the Minnesota Department of Human Services and the City of Minneapolis Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Controls Over Compliance and Noncompliance Criteria: Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non‐federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that there was no observable control documentation to directly indicate that a search for price comparisons or suspension and debarment was performed on vendors. Cause: Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect: A lack of established controls increases the overall risk that Organization is contracting and awarding contracts to suspended or debarred vendors or is not obtaining the best possible prices for goods or services. Questioned Costs: None reported. Context/Sampling: For Federal Financial Assistance Listing # 17.274, a nonstatistical sample of 44 transactions out of 220 total transactions were selected for testing. Required documentation related to the price comparison search was not maintained for 14 of the items selected. Required documentation related to the search for suspension and debarment was not maintained for any of the items selected. For Federal Financial Assistance Listing # 21.027 a nonstatistical sample of seven transactions out of 21 total transactions were selected for testing. Required documentation related to the search for suspension and debarment was not maintained for two of the items selected. Repeat Finding from Prior Years: Yes Recommendation: We recommend that management maintain adequate supporting documentation and records to document history and methods of procurement, suspension, and debarment and the procedures performed to comply with these CFR sections. Views of Responsible Officials: Management is in agreement with this finding.
Identification of federal program: US DEPARTMENT OF EDUCATION, passed through the Indiana Department of Education, Charter Schools Program 84.282A Criteria : In accordance with CFR 200.318(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. In addition, in accordance with CFR 200.318(a) the non- federal entity must have and use documented procurement procedures consistent with federal procurement standards. Condition: Expenditures tested that met the small purchase threshold (purchases with a cost between $10,000 and $250,000) did not have documentation detailing the history of procurement. Cause : The School does not have procurement policies that follow federal guidelines, specifically 2 CFR 200.320 Methods of procurement to be followed. Effect : Property and equipment additions made using federal funds during the year did not have appropriate a support showing procurement policies were followed. Questioned costs: $83,864 Context: Two out of two purchases tested for procurement did not follow federal procurement methods. Recommendation : We recommend that the School institute procurement policies whereby acquisitions follow appropriate procurement steps as required by 2 CRF 200.350 and documentation of procurement decisions is maintained. View of responsible officials : See attached corrective action plan
U.S. Department of Health and Human Services Passed through Health Research & Educational Trust (HRET), Federal Financial Assistance Listing #93.318, 87728, Protecting and Improving Health Globally: Building and Strengthening Public Health Impact, Systems, Capacity and Security Procurement Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non‐federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction. The Organization is required to create a written procurement, suspension, and debarment policy that complies with applicable federal requirements and to follow this policy when procuring goods and services. The Organization is also required to retain documentation supporting performance of a price analysis and open competition. Condition: The Organization’s procurement policy does not contain all provisions required by Appendix II to 2 CFR Part 200. Additionally, there was no documentation retained supporting a price analysis over the transactions tested. Cause: The Organization has limited staffing and did not have proper controls in place relating to review of the procurement policy. Effect: The Organization did not ensure that the procurement policy was complete and accurate. Questioned Costs: None reported. Context: A nonstatistical sample of 4 out of 9 procurement transactions were selected for testing, which accounted for $175,792 of $370,234 qualified expenditures.Repeat Finding from Prior Years: No Recommendation: We recommend the Organization follow control processes implemented which includes updating the procurement policy and documenting the performance of required procurement procedures. Views of Responsible Officials: Management agrees with the finding.
Federal Program Information: Funding Agency: U.S. Department of Agriculture Title: USDA School Breakfast Program and National School Lunch Program FAL Number: 10.553 and 10.555 Passthrough: New Mexico Public Education Department Award Year: 2022 Criteria: §200.213 Suspension and debarment. Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, sub awards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. §200.317 Procurements by states. When procuring property and services under a Federal award, a state must follow the same policies and procedures it uses for procurements from its non-Federal funds. The state will comply with §200.322 Procurement of recovered materials and ensure that every purchase order or other contract includes any clauses required by section §200.326 Contract provisions. All other non-Federal entities, including sub recipients of a state, will follow §200.318 General procurement standards through 200.326 Contract provisions. §200.318 General procurement standards. (a) The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. APPENDIX II TO PART 200—CONTRACT PROVISIONS FOR NON-FEDERAL ENTITY CONTRACTS UNDER FEDERAL AWARDS In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. (H) Debarment and Suspension (Executive Orders 12549 and 12689)—A contract award (see 2 CFR 180.220) must not be made to parties listed on the government-wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), “Debarment and Suspension.” https://www.sam.gov/portal/public/SAM/ SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. Condition: During our testing of single audit disbursements, we identified five vendors which would meet the requirement of verifying that the vendor was not suspended or debarred or otherwise excluded from receiving the contract which was funded through Federal dollars. The vendor received single payments in excess of $25,000 from the District from Federal grant sources. The vendors are not currently suspended or debarred from receiving Federal contracts; however, the District did not have proper internal controls in place to verify this prior to the purchase. Questioned Costs: None Cause: District personnel did not verify that vendors which meet the $25,000 thresholds are not suspended, debarred, or otherwise excluded from participating in contracts funded through Federal awards due to a misunderstanding of staff personnel regarding this requirement. Effect: The District is not in compliance with Federal regulations related to the grant and could put funding in jeopardy or require the District to reimburse the program for improper grant distributions.Auditor’s Recommendation: We recommend the District establish a policy and implement procedures regarding large purchases related to Federal grants to insure that no vendors who are suspended, debarred, or otherwise excluded from participating in transactions funded through Federal grants are used. As identified above, there are several methods in which the District can verify vendors are not suspended or debarred. The District may have the vendor provide an annual certification that it is not currently suspended, debarred, or otherwise prevented from receiving Federal dollars. In other occasions in which a single purchase is going to be made, the purchasing procedures should include looking up the vendor on the GSA website, printing a copy of the verification, and placing it in the file with the purchase order. The District has options, and it should establish what method is the least intrusive but also effective in complying with the requirements of the Uniform Grant Guidance. Responsible Official’s Plan: • Specific corrective action plan for finding: The Grants Finance Department, Purchasing Department along with the Federal Grants Department will review vendors that are issued requisitions at each approval level to assist in catching $25K or more for Suspension and Debarment. A printed document from SAM.GOV verifying eligibility to Requisitions over $25K should be attached. At initial setup of new vendors, the Purchasing Department will review vendors in SAM.GOV. A printed document from SAM.GOV verifying eligibility of vendor will be attached to the vendor file. • Timeline for completion of corrective action plan: July 1, 2023 • Employee position(s) responsible for meeting the timeline: Grants Specialists, CPO, Finance Specialist, Purchasing Specialist, Federal Grants Coordinator, Federal Grants Specialist
2022 ? 001: Procurement Federal Agency: U.S. Department of Justice Federal Program Name: Crime Victim Services Assistance Listing Number: 16.575 Pass-Through Agency: Minnesota Department of Public Safety Office of Justice Programs Pass-Through Number(s): A-CVS-2020-CADA-00030 Award Period: October 1, 2019 through September 30, 2021 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR section 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. Condition: The Organization's procurement policy is limited in terms of documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. Questioned costs: None Context: We noted the Organization?s current policy states ?expenditures in excess of $5,000 for the purchase of a single item is required to have bids from three suppliers if possible.? However, the federal guidelines have increased those same thresholds to $10,000 for quotations and $250,000 for sealed bids. The policy is silent as to when sealed bids are required. Cause: The process of ensuring grant requirements are understood. Effect: Procurement transactions may be not be compliant with Uniform Guidance. Repeat Finding: No Recommendation: We recommend the Organization update the purchasing section of its current Fiscal Policies and Procedures manual. The updated procedures should at a minimum address general procurement standards. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 001: Procurement Federal Agency: U.S. Department of Justice Federal Program Name: Crime Victim Services Assistance Listing Number: 16.575 Pass-Through Agency: Minnesota Department of Public Safety Office of Justice Programs Pass-Through Number(s): A-CVS-2020-CADA-00030 Award Period: October 1, 2019 through September 30, 2021 Type of Finding: ? Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR section 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. Condition: The Organization's procurement policy is limited in terms of documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. Questioned costs: None Context: We noted the Organization?s current policy states ?expenditures in excess of $5,000 for the purchase of a single item is required to have bids from three suppliers if possible.? However, the federal guidelines have increased those same thresholds to $10,000 for quotations and $250,000 for sealed bids. The policy is silent as to when sealed bids are required. Cause: The process of ensuring grant requirements are understood. Effect: Procurement transactions may be not be compliant with Uniform Guidance. Repeat Finding: No Recommendation: We recommend the Organization update the purchasing section of its current Fiscal Policies and Procedures manual. The updated procedures should at a minimum address general procurement standards. Views of responsible officials: There is no disagreement with the audit finding.
2022 ? 001 ? Child Nutrition Cluster ? Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 2020-2021 and FY 2021-2022 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6) Condition: During our testing, we noted the Westfield-Washington Schools did not have a policy to review vendors to ensure they were not suspended or debarred. Questioned costs: None Context: Although Westfield Washington School Corporation did not have a policy in place in conformity with the federal Uniform Guidance criteria, the entities with which the Westfield Washington School Corporation made purchases from were not suspended or debarred. Cause: Improper understanding and implementation of federal Uniform Guidance policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: Yes Recommendation: We recommend the Westfield-Washington Schools increased training for those individuals involved in procurement and contract approval to ensure all federal Uniform Guidance requirements such as suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 001 ? Child Nutrition Cluster ? Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 2020-2021 and FY 2021-2022 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6) Condition: During our testing, we noted the Westfield-Washington Schools did not have a policy to review vendors to ensure they were not suspended or debarred. Questioned costs: None Context: Although Westfield Washington School Corporation did not have a policy in place in conformity with the federal Uniform Guidance criteria, the entities with which the Westfield Washington School Corporation made purchases from were not suspended or debarred. Cause: Improper understanding and implementation of federal Uniform Guidance policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: Yes Recommendation: We recommend the Westfield-Washington Schools increased training for those individuals involved in procurement and contract approval to ensure all federal Uniform Guidance requirements such as suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 001 ? Child Nutrition Cluster ? Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 2020-2021 and FY 2021-2022 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6) Condition: During our testing, we noted the Westfield-Washington Schools did not have a policy to review vendors to ensure they were not suspended or debarred. Questioned costs: None Context: Although Westfield Washington School Corporation did not have a policy in place in conformity with the federal Uniform Guidance criteria, the entities with which the Westfield Washington School Corporation made purchases from were not suspended or debarred. Cause: Improper understanding and implementation of federal Uniform Guidance policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: Yes Recommendation: We recommend the Westfield-Washington Schools increased training for those individuals involved in procurement and contract approval to ensure all federal Uniform Guidance requirements such as suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 001 ? Child Nutrition Cluster ? Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 2020-2021 and FY 2021-2022 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6) Condition: During our testing, we noted the Westfield-Washington Schools did not have a policy to review vendors to ensure they were not suspended or debarred. Questioned costs: None Context: Although Westfield Washington School Corporation did not have a policy in place in conformity with the federal Uniform Guidance criteria, the entities with which the Westfield Washington School Corporation made purchases from were not suspended or debarred. Cause: Improper understanding and implementation of federal Uniform Guidance policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: Yes Recommendation: We recommend the Westfield-Washington Schools increased training for those individuals involved in procurement and contract approval to ensure all federal Uniform Guidance requirements such as suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 001 ? Child Nutrition Cluster ? Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 2020-2021 and FY 2021-2022 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6) Condition: During our testing, we noted the Westfield-Washington Schools did not have a policy to review vendors to ensure they were not suspended or debarred. Questioned costs: None Context: Although Westfield Washington School Corporation did not have a policy in place in conformity with the federal Uniform Guidance criteria, the entities with which the Westfield Washington School Corporation made purchases from were not suspended or debarred. Cause: Improper understanding and implementation of federal Uniform Guidance policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: Yes Recommendation: We recommend the Westfield-Washington Schools increased training for those individuals involved in procurement and contract approval to ensure all federal Uniform Guidance requirements such as suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 001 ? Child Nutrition Cluster ? Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 2020-2021 and FY 2021-2022 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6) Condition: During our testing, we noted the Westfield-Washington Schools did not have a policy to review vendors to ensure they were not suspended or debarred. Questioned costs: None Context: Although Westfield Washington School Corporation did not have a policy in place in conformity with the federal Uniform Guidance criteria, the entities with which the Westfield Washington School Corporation made purchases from were not suspended or debarred. Cause: Improper understanding and implementation of federal Uniform Guidance policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: Yes Recommendation: We recommend the Westfield-Washington Schools increased training for those individuals involved in procurement and contract approval to ensure all federal Uniform Guidance requirements such as suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 001 ? Child Nutrition Cluster ? Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Federal Award Identification Number and Year: FY 2020-2021 and FY 2021-2022 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: FY 2020-2021, FY 2021-2022 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6) Condition: During our testing, we noted the Westfield-Washington Schools did not have a policy to review vendors to ensure they were not suspended or debarred. Questioned costs: None Context: Although Westfield Washington School Corporation did not have a policy in place in conformity with the federal Uniform Guidance criteria, the entities with which the Westfield Washington School Corporation made purchases from were not suspended or debarred. Cause: Improper understanding and implementation of federal Uniform Guidance policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: Yes Recommendation: We recommend the Westfield-Washington Schools increased training for those individuals involved in procurement and contract approval to ensure all federal Uniform Guidance requirements such as suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
FA 2022-001 Improve Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425D200012 (Year: 2020), S425U210012 (Year: 2021) Questioned Costs: $61,000.00 Repeat of Prior Year Finding: None Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $2,583,527.47 were expended and reported on the Atkinson County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 200.404 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed that ?retention? bonuses were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. Furthermore, the School District does not have the authority or ability to retain these individuals as they were not employees of the School District and contract provisions requiring the individuals to remain in the service of the School District for a stated period of time was not reflected within the associated contract. Therefore, expenditures totaling $61,000.00 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $61,000.00 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process and approved by the local Board of Education; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Improve Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425D200012 (Year: 2020), S425U210012 (Year: 2021) Questioned Costs: $61,000.00 Repeat of Prior Year Finding: None Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $2,583,527.47 were expended and reported on the Atkinson County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 200.404 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed that ?retention? bonuses were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. Furthermore, the School District does not have the authority or ability to retain these individuals as they were not employees of the School District and contract provisions requiring the individuals to remain in the service of the School District for a stated period of time was not reflected within the associated contract. Therefore, expenditures totaling $61,000.00 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $61,000.00 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process and approved by the local Board of Education; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing policies and procedures. Views of Responsible Officials: We concur with this finding.
Section III. Findings and Questioned Costs for Federal Awards 2022-002 Procurement United States Department of Education? ALN 84.425F Education Stabilization Fund - Institutional Portion Criteria: Non-federal entities other than 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. Condition: The Law School could not provide sufficient documented rationales for sole source awards for 2 out of 2 vendors selected for testing. Cause: A Procurement Policy incorporating federal procurement standards identified in 2 CRF Part 200 was not adopted by the Law School until June 15, 2022. As such, the Law School did not have adequate policy during fiscal 2022. Effect: Sole source awards were not properly documented. Questioned Costs: None Context: This is a repeat audit finding from the prior year audit and was reported as finding 2021-002. Recommendation: The Law School should ensure that they have sufficient documentation to support rationale for sole source awards and are in compliance with the federal procurement standards. View of Responsible Officials: The Law School agrees with the finding and have adopted an appropriate procurement policy as of June 15, 2022. Awards, including sole source awards will be adequately documented.
Criteria: Federal regulations 2 CFR 200.318 states that the Airport must use its own documented procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards in 2 CFR 200.318 through 200.326. In addition, 2 CFR 200.303 states, the Airport, as a recipient of federal funds, must establish and maintain effective internal controls over its federal awards that provides reasonable assurance that the Airport is managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. Condition: During our testing, we noted the Airport had not adopted a procurement policy in compliance with federal regulations as noted in the previous audit. Cause: The Airport has not documented a procurement policy that complies with federal regulations. Effect: Failure to have a documented procurement policy may result in entering into a contract that may not be in compliance with federal standards. Questioned Costs: None noted. Repeat Finding: Yes Recommendation: We recommend that the Airport adopt and document a procurement policy that is in compliance with federal regulations. Response: Please see final page of this report for management?s response as found on the Airport?s letterhead.
Criteria: Federal regulations 2 CFR 200.318 states that the Airport must use its own documented procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards in 2 CFR 200.318 through 200.326. In addition, 2 CFR 200.303 states, the Airport, as a recipient of federal funds, must establish and maintain effective internal controls over its federal awards that provides reasonable assurance that the Airport is managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. Condition: During our testing, we noted the Airport had not adopted a procurement policy in compliance with federal regulations as noted in the previous audit. Cause: The Airport has not documented a procurement policy that complies with federal regulations. Effect: Failure to have a documented procurement policy may result in entering into a contract that may not be in compliance with federal standards. Questioned Costs: None noted. Repeat Finding: Yes Recommendation: We recommend that the Airport adopt and document a procurement policy that is in compliance with federal regulations. Response: Please see final page of this report for management?s response as found on the Airport?s letterhead.
Criteria: Federal regulations 2 CFR 200.318 states that the Airport must use its own documented procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards in 2 CFR 200.318 through 200.326. In addition, 2 CFR 200.303 states, the Airport, as a recipient of federal funds, must establish and maintain effective internal controls over its federal awards that provides reasonable assurance that the Airport is managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. Condition: During our testing, we noted the Airport had not adopted a procurement policy in compliance with federal regulations as noted in the previous audit. Cause: The Airport has not documented a procurement policy that complies with federal regulations. Effect: Failure to have a documented procurement policy may result in entering into a contract that may not be in compliance with federal standards. Questioned Costs: None noted. Repeat Finding: Yes Recommendation: We recommend that the Airport adopt and document a procurement policy that is in compliance with federal regulations. Response: Please see final page of this report for management?s response as found on the Airport?s letterhead.
Criteria: Federal regulations 2 CFR 200.318 states that the Airport must use its own documented procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards in 2 CFR 200.318 through 200.326. In addition, 2 CFR 200.303 states, the Airport, as a recipient of federal funds, must establish and maintain effective internal controls over its federal awards that provides reasonable assurance that the Airport is managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. Condition: During our testing, we noted the Airport had not adopted a procurement policy in compliance with federal regulations as noted in the previous audit. Cause: The Airport has not documented a procurement policy that complies with federal regulations. Effect: Failure to have a documented procurement policy may result in entering into a contract that may not be in compliance with federal standards. Questioned Costs: None noted. Repeat Finding: Yes Recommendation: We recommend that the Airport adopt and document a procurement policy that is in compliance with federal regulations. Response: Please see final page of this report for management?s response as found on the Airport?s letterhead.
Criteria: Federal regulations 2 CFR 200.318 states that the Airport must use its own documented procurement procedures which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards in 2 CFR 200.318 through 200.326. In addition, 2 CFR 200.303 states, the Airport, as a recipient of federal funds, must establish and maintain effective internal controls over its federal awards that provides reasonable assurance that the Airport is managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. Condition: During our testing, we noted the Airport had not adopted a procurement policy in compliance with federal regulations as noted in the previous audit. Cause: The Airport has not documented a procurement policy that complies with federal regulations. Effect: Failure to have a documented procurement policy may result in entering into a contract that may not be in compliance with federal standards. Questioned Costs: None noted. Repeat Finding: Yes Recommendation: We recommend that the Airport adopt and document a procurement policy that is in compliance with federal regulations. Response: Please see final page of this report for management?s response as found on the Airport?s letterhead.
Federal Agency: Department of Justice CFDA Cluster Nos.: 16.922 Federal Program Cluster: Equitable Sharing Program Compliance Requirement: Procurement, Suspension, and Debarment ? Noncompetitive Procurement (Sole Source Designation), Competition ? Formal Procurement Methods Type of Finding: Material Weakness Questioned Costs: $0 Criteria: 2 CFR 200.318 General Procurement Standards, 2 CFR 200.319 Competition, 2 CFR 200.320 Methods of Procurement to be Followed. (1) All procurement transactions for the acquisition of services required under federal award must be conducted in a manner providing full and open competition in compliance with the standards of section 200.319 and 200.320. Additionally, in compliance with the standards of section 200.320 (c) (2) Noncompetitive procurement, there are specific circumstances in which noncompetitive procurement can be used.
2022-001 PROCUREMENT Federal Assistance Listing Number: Higher Education Emergency Relief Fund (HEERF) 84.425F Criteria A non-Federal entity must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. The College must use its 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. Observation/Condition/Context The College did not follow its procurement policy in one identified instance out of six tested. It was noted that the College did not solicit competitive price quotations for a purchase exceeding policy thresholds under the HEERF program. Questioned Cost There were no questioned costs associated with this finding. Cause/Effect Following the established procurement policy allows for cost comparison and the ability to evaluate whether a vendor is reputable and if the contract has all the required provisions. By not following the policy, the College opens itself up to higher costs. Recommendation We recommend that the College implement a review process to identify potential instances of noncompliance with the College?s procurement policy.
2022-007 Premium Pay (Other Non-Compliance) Assistance Listing Number 21.027 Federal Agency Department of Treasury Program Name Coronavirus State and Local Fiscal Recover Funds Award Number Multiple Award Year 2021-2022 Question Costs None CONDITION: During our testing over premium pay, we noted that 6 elected officials were incorrectly paid premium pay totaling $6,000. CRITERIA: Per 31 CFR Part 35 [RINI505-AC77], Coronavirus State and Local Fiscal Recovery Funds, Final Rule and 2 CFR ?200.318 (C) elected official are prohibited from using funds to pay themselves premium pay. The New Mexico Governmental Conduct Act states that public official at any level of New Mexico state or local government shall not take an official act primarily to improve the employees financial interest or position. EFFECT: The City is not in compliance with state and federal regulations. CAUSE: The City awarded Premium Pay to all City employees including elected officials. AUDITOR?S RECOMMENDATION: We recommend the City create internal controls to ensure that they review federal and state regulations prior to disbursements to ensure costs are allowable. We also recommend the City work with elected officials to create a corrective action plan to recoup the federal funds. MANAGEMENT RESPONSE: Initially premium payments were only made to paid staff. Management was unaware of the provisions in reference to elected officials not being able to receive premium pay so they requested premium pay for the elected officials at a later date. The City Manager has sent an email to all elected officials requesting that the funds be reimbursed to the City. At this time (3) three of the (6) six elected officials have reimbursed the City and the others have committed to do so as well. RESPONSIBLE PARTY: City Manager/Finance Director TIMELINE FOR CORRECTIVE ACTION: June 30, 2023
Finding No. 2022-001 Procurement Federal Agency: Federal Communications Commission Federal Program Name: COVID 19 ? Emergency Connectivity Fund Program Assistance Listing Number: 32.009 Award Period: July 1, 2021 through August 29, 2023 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria The City must comply with their purchasing policy, which encompasses the procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition The City?s procurement for two vendors did not comply with Uniform Guidance. Questioned Costs $1,472,280 Context The City is required to utilize a sealed bidding process for expenditures in excess of the $250,000 threshold per Uniform Guidance. As a result of our testing, we noted two out of two vendors selected for testing with expenditures in excess of the threshold which did not utilize the sealed bidding process. The sample was a statistically valid sample. Effect The City made purchases that did not follow federal Uniform Guidance procurement standards. Cause The City had very limited time to apply for this grant funding. They obtained competitive quotations as the sealed bidding process would not have been feasible given the time needed to go through the process. However, a bid waiver was not obtained, although it could have been within the necessary timeframe.
Finding No. 2022-001 Procurement Federal Agency: Federal Communications Commission Federal Program Name: COVID 19 ? Emergency Connectivity Fund Program Assistance Listing Number: 32.009 Award Period: July 1, 2021 through August 29, 2023 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria The City must comply with their purchasing policy, which encompasses the procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition The City?s procurement for two vendors did not comply with Uniform Guidance. Questioned Costs $1,472,280 Context The City is required to utilize a sealed bidding process for expenditures in excess of the $250,000 threshold per Uniform Guidance. As a result of our testing, we noted two out of two vendors selected for testing with expenditures in excess of the threshold which did not utilize the sealed bidding process. The sample was a statistically valid sample. Effect The City made purchases that did not follow federal Uniform Guidance procurement standards. Cause The City had very limited time to apply for this grant funding. They obtained competitive quotations as the sealed bidding process would not have been feasible given the time needed to go through the process. However, a bid waiver was not obtained, although it could have been within the necessary timeframe.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $116,610 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $20,854,735 were expended and reported on the Hall County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 202.403 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Bonuses totaling $20,344 were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. ? A payment in the amount of $96,266 was made to the janitorial company utilized by the School District to provide bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Therefore, expenditures totaling $116,610 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $116,610 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding. FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $116,610 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $20,854,735 were expended and reported on the Hall County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 202.403 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Bonuses totaling $20,344 were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. ? A payment in the amount of $96,266 was made to the janitorial company utilized by the School District to provide bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Therefore, expenditures totaling $116,610 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $116,610 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding. FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $116,610 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $20,854,735 were expended and reported on the Hall County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 202.403 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Bonuses totaling $20,344 were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. ? A payment in the amount of $96,266 was made to the janitorial company utilized by the School District to provide bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Therefore, expenditures totaling $116,610 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $116,610 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $116,610 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $20,854,735 were expended and reported on the Hall County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 202.403 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Bonuses totaling $20,344 were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. ? A payment in the amount of $96,266 was made to the janitorial company utilized by the School District to provide bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Therefore, expenditures totaling $116,610 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $116,610 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding. FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $116,610 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $20,854,735 were expended and reported on the Hall County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 202.403 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Bonuses totaling $20,344 were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. ? A payment in the amount of $96,266 was made to the janitorial company utilized by the School District to provide bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Therefore, expenditures totaling $116,610 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $116,610 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding. FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $116,610 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $20,854,735 were expended and reported on the Hall County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 202.403 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Bonuses totaling $20,344 were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. ? A payment in the amount of $96,266 was made to the janitorial company utilized by the School District to provide bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Therefore, expenditures totaling $116,610 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $116,610 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $116,610 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $20,854,735 were expended and reported on the Hall County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 202.403 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Bonuses totaling $20,344 were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. ? A payment in the amount of $96,266 was made to the janitorial company utilized by the School District to provide bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Therefore, expenditures totaling $116,610 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $116,610 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding. FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $116,610 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $20,854,735 were expended and reported on the Hall County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 202.403 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Bonuses totaling $20,344 were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. ? A payment in the amount of $96,266 was made to the janitorial company utilized by the School District to provide bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Therefore, expenditures totaling $116,610 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $116,610 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding. FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 ? 84.425D ? Elementary and Secondary School Emergency Relief Fund COVID-19 ? 84.425U ? American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $116,610 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $20,854,735 were expended and reported on the Hall County Board of Education?s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 ? Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 ? Factors Affecting Allowability of Costs state that ?costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity? (g) Be adequately documented?? In addition, provisions included in the Uniform Guidance, Section 202.403 ? Reasonable Costs state that ?a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm?s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award? (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award?s cost.? Furthermore, provisions included in the Uniform Guidance, Section 200.318 ? General Procurement Standards state that ?the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations? for the acquisition of property or services required under a Federal award or subaward?? Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed the following deficiencies: ? Bonuses totaling $20,344 were paid to individuals who were not employees of the School District. These individuals were hired to perform specific functions as detailed within the associated contracts and were paid amounts in excess of the stated rate noted within these contracts. ? A payment in the amount of $96,266 was made to the janitorial company utilized by the School District to provide bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Therefore, expenditures totaling $116,610 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $116,610 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District?s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: Per discussion with management, the School District believed that the expenditures were allowable as the expenditures were approved by GaDOE through the Consolidated Application process; however, they were not aware that contract amendments should be initiated prior to the expenditure of funds in this manner. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are in line with provisions reflected within the associated contract and/or contract amendments. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District?s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
Finding 2022-003: Internal Control and Compliance over Procurement Federal Agency: Department of the Treasury Program: Coronavirus State and Local Fiscal Recovery Funds: 21.027 Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.237, EC3 is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Condition: EC3 could not provide evidence that the purchase of 300 laptops for an aggregate purchase price of $362,004 followed formal procurement procedures. The purchase exceeded both the $30,000 procurement threshold for competitive bids set by EC3?s purchasing policy and the Uniform Guidance simplified acquisition threshold of $250,000. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: EC3 was not in compliance with the procurement requirements of the Uniform Guidance. Questioned costs: $362,004 based on invoice for purchase of 300 laptops applied to the program. Recommendation: We recommend that EC3 establish procedures to ensure that their purchasing policy is followed including the use of competitive bids or proposals, when appropriate.
Assistance Listing Number: 84.425U Program Title: COVID-19 Education Stabilization Fund - American Rescue Plan ? ESSER III ? MFT & Operating Fund Federal Award Number: N/A Federal Award Year: 2021/2022 Pass Through Entity: Chicago Public Schools Criteria: In accordance with 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization is either lacking or has nonconforming written policies and procedures for the following administrative functions, required by the Uniform Guidance: 1. Financial management - 2 CFR 200.302(b)(6) 2. Allowable Costs - 2 CFR 200.302(b)(7) 3. Federal payment - 2 CFR 200.305(b)(1) 4. Procurement - 2 CFR 200.318(a) and 2 CFR 200.318(c)(1) 5. Competition - 2 CFR 200.319(d) 6. Methods of procurement to be followed - 2 CFR 200.320 7. Compensation (Personal Services) - 2 CFR 200.430(a)(1) 8. Compensation (Fringe Benefits - Leave) - 2 CFR 200.431(b)(1) 9. Relocation costs of employees - 2 CFR 200.464(a)(2) 10. Travel costs - 2 CFR 200.474 Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our review of the Organization?s policies and procedures, which were found to be not in accordance with Uniform Guidance. Cause: The Organization was not aware of the specific Uniform Guidance requirements for certain written policies and procedures. Effect: The Organization did not have these policies and procedures in place to reasonably ensure that program functions are achieved effectively, efficiently and in compliance with Federal statutes, regulations, and the terms and conditions of the award. The Organization was not in compliance with the administrative requirements set forth in the Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization design procedures and implement internal control procedures to ensure that the Uniform Guidance administrative requirements are met. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and plans on implementing the appropriate policies and procedures in accordance with Uniform Guidance.
Assistance Listing Number: 84.425U Program Title: COVID-19 Education Stabilization Fund - American Rescue Plan ? ESSER III ? MFT & Operating Fund Federal Award Number: N/A Federal Award Year: 2021/2022 Pass Through Entity: Chicago Public Schools Criteria: In accordance with 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization is either lacking or has nonconforming written policies and procedures for the following administrative functions, required by the Uniform Guidance: 1. Financial management - 2 CFR 200.302(b)(6) 2. Allowable Costs - 2 CFR 200.302(b)(7) 3. Federal payment - 2 CFR 200.305(b)(1) 4. Procurement - 2 CFR 200.318(a) and 2 CFR 200.318(c)(1) 5. Competition - 2 CFR 200.319(d) 6. Methods of procurement to be followed - 2 CFR 200.320 7. Compensation (Personal Services) - 2 CFR 200.430(a)(1) 8. Compensation (Fringe Benefits - Leave) - 2 CFR 200.431(b)(1) 9. Relocation costs of employees - 2 CFR 200.464(a)(2) 10. Travel costs - 2 CFR 200.474 Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our review of the Organization?s policies and procedures, which were found to be not in accordance with Uniform Guidance. Cause: The Organization was not aware of the specific Uniform Guidance requirements for certain written policies and procedures. Effect: The Organization did not have these policies and procedures in place to reasonably ensure that program functions are achieved effectively, efficiently and in compliance with Federal statutes, regulations, and the terms and conditions of the award. The Organization was not in compliance with the administrative requirements set forth in the Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization design procedures and implement internal control procedures to ensure that the Uniform Guidance administrative requirements are met. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and plans on implementing the appropriate policies and procedures in accordance with Uniform Guidance.
2022-002 Procurement and Suspension and Debarment Federal Agency: United States Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: Not Available Pass-Through Agency: State of Connecticut Office of Policy and Management Pass-Through Number: 12060-OPM20600-29669 Award Period: March 3, 2021 through December 31, 2026 Type of Finding: Material Noncompliance Material Weakness in Internal Control over Compliance Criteria or specific requirement 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The Town?s procurement policy does not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. In addition, the Town did not properly go out to a sealed bid for an item procured by the grant in accordance with their existing policy. The Town did receive comparable pricing for the item tested, however documentation was not retained to indicate approval for waiving sealed bid requirements. Furthermore, there were no controls in place to review for suspension and debarment on related procurement activities. Questioned Costs: $215,000 Context: There was one selection tested for procurement and three selections tested for suspension and debarment . Cause: The Town did not have the resources necessary to implement a conforming policy during the fiscal year. Effect: With the absence of a compliant policy, the Town is at risk for noncompliance as it relates to all federal procurement requirements. Repeat Finding: No. Recommendations: We recommend that the Town review its formal procurement policies and revise with the criteria in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials: Management agrees with this finding.
United States Department of Agriculture Federal Assistance Listing Number 10.558 Child and Adult Care Food Program Criteria or specific requirement: Procurement and Suspension and Debarment (2 CFR 200.214, 2 CFR 200.318) Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 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. Condition: Procurement records were not maintained and the Organization's procurement policy was not in compliance with Uniform Guidance. Questioned Costs: None Context: A sample of one vendor was tested out of the total population of 10 vendors. Procurement procedures were not completed for the one vendor. The sampling methodology used is not and is not intended to be statistically valid. Effect: Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance. Cause: The Organization did not have proper oversight to ensure procurement procedures were completed. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend implementing procurement policies that comply with the Uniform Guidance and procedures to ensure procurement requirements as required by grantors are being met. Views of Responsible Officials and Planned Corrective Actions: Management concurs with findings and plans to implement the recommendations above. Starting in August 2023, SADCCF will notify potential bidders of the opportunity to bid on the USDA meal program by radio announcement.
Finding 2022-001 - Procurement Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was a isolated instance within the scope of the tested population. Identification of Repeat Finding: No Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Finding 2022-001 - Procurement Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was a isolated instance within the scope of the tested population. Identification of Repeat Finding: No Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Finding 2022-001 - Procurement Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was a isolated instance within the scope of the tested population. Identification of Repeat Finding: No Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Finding 2022-001 - Procurement Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was a isolated instance within the scope of the tested population. Identification of Repeat Finding: No Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Finding 2022-001 - Procurement Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was a isolated instance within the scope of the tested population. Identification of Repeat Finding: No Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Finding 2022-001 - Procurement Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was a isolated instance within the scope of the tested population. Identification of Repeat Finding: No Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Finding Number: 2022-004 Prior Year Finding: No Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 ? Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2021 ? 6/30/2022) Compliance Requirement: Procurement Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or Specific Requirement: Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply 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). Compliance: Compliance: Per 2 CFR section 200.318, a 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. Per 2 CFR section 200.319, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and ? 200.320. Per the Town?s purchasing policy, goods or services costing $10,000 or more must be purchased from the lowest responsive bidder meeting specifications after advertising for bids. Condition/Context: The Town was unable to provide documentation to support compliance with required procurement processes for goods or services over $10,000 for one vendor, including how the vendor was procured and whether there was full and open competition in the procurement process. Draft - March 29, 2023 Subject to Change TOWN OF ELKTON, MARYLAND SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) JUNE 30, 2022 (14) Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Questioned Costs: None noted. Cause: The Town?s internal controls were not sufficient to ensure that procurement policies were followed for purchases made for the program. Effect: Failure to adhere to procurement polices and procedures may result in obtaining goods or services under terms that are not in the best interest of the federal program. Recommendation: The Town should review and enhance controls and procedures to ensure that it follows procurement policy for all goods and services charged to the program. Views of Responsible Officials: Management agrees with the finding
Federal Agency: All Federal Agencies Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers Federal Award Identification Number and Year: N/A ? applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters (Noncompliance) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City?s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted. Context: Although the City did not have a policy in place in conformity with the federal uniform guidance criteria, the City did follow its procedures as they relate to the contracts under the procurements applicable to the City's major program. Cause: The City did not have the resources necessary to implement a conforming policy during the fiscal year under audit. Effect: With the absence of a compliant policy, the City is at risk for noncompliance as it relates to federal procurement. Repeat Finding: Yes, repeat of finding 2021-001. Recommendation: We recommend that the City review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: Management agrees with this finding.
Federal Agency: All Federal Agencies Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers Federal Award Identification Number and Year: N/A ? applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters (Noncompliance) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City?s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted. Context: Although the City did not have a policy in place in conformity with the federal uniform guidance criteria, the City did follow its procedures as they relate to the contracts under the procurements applicable to the City's major program. Cause: The City did not have the resources necessary to implement a conforming policy during the fiscal year under audit. Effect: With the absence of a compliant policy, the City is at risk for noncompliance as it relates to federal procurement. Repeat Finding: Yes, repeat of finding 2021-001. Recommendation: We recommend that the City review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: Management agrees with this finding.
Federal Agency: All Federal Agencies Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers Federal Award Identification Number and Year: N/A ? applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters (Noncompliance) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City?s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted. Context: Although the City did not have a policy in place in conformity with the federal uniform guidance criteria, the City did follow its procedures as they relate to the contracts under the procurements applicable to the City's major program. Cause: The City did not have the resources necessary to implement a conforming policy during the fiscal year under audit. Effect: With the absence of a compliant policy, the City is at risk for noncompliance as it relates to federal procurement. Repeat Finding: Yes, repeat of finding 2021-001. Recommendation: We recommend that the City review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: Management agrees with this finding.
Federal Agency: All Federal Agencies Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers Federal Award Identification Number and Year: N/A ? applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters (Noncompliance) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City?s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted. Context: Although the City did not have a policy in place in conformity with the federal uniform guidance criteria, the City did follow its procedures as they relate to the contracts under the procurements applicable to the City's major program. Cause: The City did not have the resources necessary to implement a conforming policy during the fiscal year under audit. Effect: With the absence of a compliant policy, the City is at risk for noncompliance as it relates to federal procurement. Repeat Finding: Yes, repeat of finding 2021-001. Recommendation: We recommend that the City review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: Management agrees with this finding.
Federal Agency: All Federal Agencies Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers Federal Award Identification Number and Year: N/A ? applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters (Noncompliance) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City?s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted. Context: Although the City did not have a policy in place in conformity with the federal uniform guidance criteria, the City did follow its procedures as they relate to the contracts under the procurements applicable to the City's major program. Cause: The City did not have the resources necessary to implement a conforming policy during the fiscal year under audit. Effect: With the absence of a compliant policy, the City is at risk for noncompliance as it relates to federal procurement. Repeat Finding: Yes, repeat of finding 2021-001. Recommendation: We recommend that the City review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: Management agrees with this finding.
Federal Agency: All Federal Agencies Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers Federal Award Identification Number and Year: N/A ? applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters (Noncompliance) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City?s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted. Context: Although the City did not have a policy in place in conformity with the federal uniform guidance criteria, the City did follow its procedures as they relate to the contracts under the procurements applicable to the City's major program. Cause: The City did not have the resources necessary to implement a conforming policy during the fiscal year under audit. Effect: With the absence of a compliant policy, the City is at risk for noncompliance as it relates to federal procurement. Repeat Finding: Yes, repeat of finding 2021-001. Recommendation: We recommend that the City review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: Management agrees with this finding.
Federal Agency: All Federal Agencies Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers Federal Award Identification Number and Year: N/A ? applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters (Noncompliance) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City?s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted. Context: Although the City did not have a policy in place in conformity with the federal uniform guidance criteria, the City did follow its procedures as they relate to the contracts under the procurements applicable to the City's major program. Cause: The City did not have the resources necessary to implement a conforming policy during the fiscal year under audit. Effect: With the absence of a compliant policy, the City is at risk for noncompliance as it relates to federal procurement. Repeat Finding: Yes, repeat of finding 2021-001. Recommendation: We recommend that the City review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: Management agrees with this finding.
Federal Agency: All Federal Agencies Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers Federal Award Identification Number and Year: N/A ? applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters (Noncompliance) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City?s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted. Context: Although the City did not have a policy in place in conformity with the federal uniform guidance criteria, the City did follow its procedures as they relate to the contracts under the procurements applicable to the City's major program. Cause: The City did not have the resources necessary to implement a conforming policy during the fiscal year under audit. Effect: With the absence of a compliant policy, the City is at risk for noncompliance as it relates to federal procurement. Repeat Finding: Yes, repeat of finding 2021-001. Recommendation: We recommend that the City review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: Management agrees with this finding.