Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-21, FY 2021-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-004. Condition and Context An effective internal controls system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. During fiscal year 2020-2021, the School Corporation purchased food and supply items from two vendors with total purchases that fell within the small purchase threshold. During 2021-2022, repair services were purchased from one vendor that fell within the small purchase threshold. Quotes were not obtained nor was full and open competition provided for the three vendors that fell within the small purchase threshold during the audit period. Additionally, there was no documentation available to support the rationale to limit competition. During 2020-2021 the School Corporation did not follow procurement requirements for purchases of food and supply items which exceeded the simplified acquisition threshold of $150,000. The School Corporation did not correctly procure a contract for the one vendor that exceeded the simplified acquisition threshold. The School Corporation only considered one bid which did not adequately meet the formal procurement procedures for a simplified acquisition. INDIANA STATE BOARD OF ACCOUNTS 14 BROWNSTOWN CENTRAL COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Non-federal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The School Corporation did not verify that one of four contracts over $25,000 was not excluded or disqualified from participation in federal award programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(i) states: "The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." 2 CFR 200.320 (Uniform Guidance) states in part: "(b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. (c) Procurement by sealed bids (formal advertising). Bids are publicly solicited and a firm fixed price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. . . . (d) Procurement by competitive proposals. The technique of competitive proposals is normally conducted with more than one source submitting an offer, and either a fixed price or cost reimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids. . . . " INDIANA STATE BOARD OF ACCOUNTS 15 BROWNSTOWN CENTRAL COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states in part: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not established a system of internal control that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 16 BROWNSTOWN CENTRAL COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Department of Agriculture, passed through Minnesota Department of Education Federal Financial Assistance Listing/CFDA Number 10.553/10.555 Child Nutrition Cluster Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance 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. Condition - In our testing of procurement, suspension, and debarment it was identified that there was no review of vendors to ensure that they are not suspended or debarred before purchases are made. 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 compliant policies increases the overall risk of non-compliance. Questioned Costs - None reported Context/Sampling - Overall procurement policy. Repeat Finding from Prior Years - No Recommendation - We recommend that management establish a formal process to review vendors before purchases are made to ensure they are not suspended or debarred and are in compliance with the Uniform Guidance and 2 CFR sections 200.318 through 200.326. Views of Responsible Officials - There is no disagreement with the audit finding.
Department of Agriculture, passed through Minnesota Department of Education Federal Financial Assistance Listing/CFDA Number 10.553/10.555 Child Nutrition Cluster Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance 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. Condition - In our testing of procurement, suspension, and debarment it was identified that there was no review of vendors to ensure that they are not suspended or debarred before purchases are made. 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 compliant policies increases the overall risk of non-compliance. Questioned Costs - None reported Context/Sampling - Overall procurement policy. Repeat Finding from Prior Years - No Recommendation - We recommend that management establish a formal process to review vendors before purchases are made to ensure they are not suspended or debarred and are in compliance with the Uniform Guidance and 2 CFR sections 200.318 through 200.326. Views of Responsible Officials - There is no disagreement with the audit finding.
Department of Agriculture, passed through Minnesota Department of Education Federal Financial Assistance Listing/CFDA Number 10.553/10.555 Child Nutrition Cluster Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance 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. Condition - In our testing of procurement, suspension, and debarment it was identified that there was no review of vendors to ensure that they are not suspended or debarred before purchases are made. 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 compliant policies increases the overall risk of non-compliance. Questioned Costs - None reported Context/Sampling - Overall procurement policy. Repeat Finding from Prior Years - No Recommendation - We recommend that management establish a formal process to review vendors before purchases are made to ensure they are not suspended or debarred and are in compliance with the Uniform Guidance and 2 CFR sections 200.318 through 200.326. Views of Responsible Officials - There is no disagreement with the audit finding.
Finding 2022-003 Type of Finding: Significant deficiency in internal controls over compliance and non-compliance. Federal Award Program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181) Compliance Requirement: Procurement Criteria: Pursuant to the Uniform Guidance, for procurements of goods and services made with federal awards, River Kourt Apartments is required to have policies in place that conform with the Procurement Standards as prescribed in 2 CFR ?200.318 through ?200.320. River Kourt Apartments is required to follow the methods of procurement as prescribed in 2 CFR ?200.320. Condition: River Kourt Apartments has written policies and procedures regarding the procurement of goods and services; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR ?200.318 through ?200.320. Cause of Condition: River Kourt Apartments has written policies and procedures regarding the procurement of goods and services; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR ?200.318 through ?200.320. Effect of Condition: This increases risk that River Kourt Apartments would not materially comply with the procurement requirement for the major program. Questioned Costs: None. Context: There were no procurements over the de minimis threshold made during the year period ended June 30, 2022; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR ?200.318 through ?200.320. Repeat Finding: Yes, see Finding 2021-003. Recommendation: We recommend management revise the current policies and procedures to include all required elements for procurement procedures pursuant to 2 CFR ?200.318 through ?200.320. Procurement methods shall follow the methods as prescribed in 2 CFR ?200.320. View of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Federal Transit Cluster 20.507 AZ-90-X127 AZ-90-X132 AZ-90-X143 AZ-2018-003-00, AZ-2019-035, AZ-2020-030-00 AZ-2021-039 N/A Formula Grants For Rural Areas and Tribal Transit Program 20.509 GRT-20-0007- 926-T, CA-2019- 159-00, CA- 2021-028-00, CA-2021-031-00 N/A Federal Agency: Department of Transportation Pass-Through Agency: Arizona Department of Transportation and Quechan Indian Tribe Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension, and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. The Board adopted a Policies and Procedures Manual that requires the collection of three quotes for purchases of at least $3,000 but less than $100,000 and formal bid procedures for purchases over $100,000. CONDITION YCIPTA did not follow its Board adopted Policies and Procedures Manual or federal regulations. CAUSE YCIPTA was operating under an expired contract and did not follow Board-adopted policies. EFFECT YCIPTA was not in compliance with the Board adopted Policies and Procedures Manual and federal regulations. CONTEXT During our review of procurement, the following were noted: ? For one purchase in excess of the federal procurement threshold of $250,000, YCIPTA did not perform a sealed bid or proposal. ? For one purchase in YCIPTA?s quote range, YCIPTA did not obtain or maintain quotes. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION YCIPTA should adhere to its Board adopted Policies and Procedures Manual. When purchases are expected to be in excess of $100,000, formal procurement methods should be used to ensure the best pricing possible. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Condition: The Organization has a procurement policy; however, the policy does not include all the elements required by the Uniform Guidance (UG). The policy should detail, among other items, thresholds and procedures for each of the five procurement methods, and how conflicts of interest are identified and addressed. Criteria: 2 CFR section 200.318 through 200.326 outlines the procurement standards and the elements that should be included in the Organization?s policy. Cause: Due to time restraints, the Organization has not yet updated its current policy. Effect: The effect is unknown. Recommendation: We recommend the Organization update its procurement policy with all the elements required by the UG.
Condition: The Organization has a procurement policy; however, the policy does not include all the elements required by the Uniform Guidance (UG). The policy should detail, among other items, thresholds and procedures for each of the five procurement methods, and how conflicts of interest are identified and addressed. Criteria: 2 CFR section 200.318 through 200.326 outlines the procurement standards and the elements that should be included in the Organization?s policy. Cause: Due to time restraints, the Organization has not yet updated its current policy. Effect: The effect is unknown. Recommendation: We recommend the Organization update its procurement policy with all the elements required by the UG.
Condition: The Organization has a procurement policy; however, the policy does not include all the elements required by the Uniform Guidance (UG). The policy should detail, among other items, thresholds and procedures for each of the five procurement methods, and how conflicts of interest are identified and addressed. Criteria: 2 CFR section 200.318 through 200.326 outlines the procurement standards and the elements that should be included in the Organization?s policy. Cause: Due to time restraints, the Organization has not yet updated its current policy. Effect: The effect is unknown. Recommendation: We recommend the Organization update its procurement policy with all the elements required by the UG.
Program Information: AL #: 93.243 U.S. Department of Health and Human Services SAMHSA Youth Programs ? Youth Tree, Youth Suicide Prevention, Youth Connections Project Award Numbers: 6H79TI081193-01, 1H79SM082124-01, 1H79SM081540-01 Award Periods: 9/30/18-9/29/23, 6/30/19-6/29/24, 9/30/18-9/29/23 AL #: 93.441 U.S. Department of Health and Human Services Passed through California Rural Indian Health Board, Inc. Indian Health Services ? CRIHB 22, Indian Health Services ? CRIHB 21, COVID-19 Indian Health Services ? CRIHB 21 Award Numbers: 235-18-0004 Award Periods: 4/1/18-3/31/24 Criteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension & debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, ?Debarment and Suspension?, federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition/Context: During transactional testing, the following was noted: ? 93.441 ? 4 out of 5 vendors reviewed did not have evidence of multiple competitive bids being obtained. ? 93.243 ? 2 out of 2 vendors reviewed did not have evidence of multiple competitive bids being obtained. Additionally, there are no processes in place to check to ensure vendors are not suspended or debarred prior to conducting business. ? 93.441 - 4 out of 5 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. ? 93.243 - 2 out of 2 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The Clinic was unaware of the requirement to check vendors for suspension and debarment prior to conducting business with vendors, and there were ineffective controls in place during the period over procurement, along with lack of management oversight. Effect: The Clinic is not enacting fair competition in the procurement process nor are they following their policies by making sure bidding support is provided before the appropriate officials sign the Purchase Order. Additionally, the Clinic may be paying vendors that are suspended and debarred which would be an unallowable cost. Questioned Costs: AL#: 93.441 Known: Procurement- $42,903 AL#: 93.243 Known: Procurement- $15,380 Repeat Finding: Yes, 2021-003. Recommendation: We recommend the Clinic conduct training for staff and program managers to review the Clinic?s procurement, and suspension and debarment policies and procedures along with federal regulations. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: AL #: 93.243 U.S. Department of Health and Human Services SAMHSA Youth Programs ? Youth Tree, Youth Suicide Prevention, Youth Connections Project Award Numbers: 6H79TI081193-01, 1H79SM082124-01, 1H79SM081540-01 Award Periods: 9/30/18-9/29/23, 6/30/19-6/29/24, 9/30/18-9/29/23 AL #: 93.441 U.S. Department of Health and Human Services Passed through California Rural Indian Health Board, Inc. Indian Health Services ? CRIHB 22, Indian Health Services ? CRIHB 21, COVID-19 Indian Health Services ? CRIHB 21 Award Numbers: 235-18-0004 Award Periods: 4/1/18-3/31/24 Criteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension & debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, ?Debarment and Suspension?, federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition/Context: During transactional testing, the following was noted: ? 93.441 ? 4 out of 5 vendors reviewed did not have evidence of multiple competitive bids being obtained. ? 93.243 ? 2 out of 2 vendors reviewed did not have evidence of multiple competitive bids being obtained. Additionally, there are no processes in place to check to ensure vendors are not suspended or debarred prior to conducting business. ? 93.441 - 4 out of 5 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. ? 93.243 - 2 out of 2 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The Clinic was unaware of the requirement to check vendors for suspension and debarment prior to conducting business with vendors, and there were ineffective controls in place during the period over procurement, along with lack of management oversight. Effect: The Clinic is not enacting fair competition in the procurement process nor are they following their policies by making sure bidding support is provided before the appropriate officials sign the Purchase Order. Additionally, the Clinic may be paying vendors that are suspended and debarred which would be an unallowable cost. Questioned Costs: AL#: 93.441 Known: Procurement- $42,903 AL#: 93.243 Known: Procurement- $15,380 Repeat Finding: Yes, 2021-003. Recommendation: We recommend the Clinic conduct training for staff and program managers to review the Clinic?s procurement, and suspension and debarment policies and procedures along with federal regulations. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: AL #: 93.243 U.S. Department of Health and Human Services SAMHSA Youth Programs ? Youth Tree, Youth Suicide Prevention, Youth Connections Project Award Numbers: 6H79TI081193-01, 1H79SM082124-01, 1H79SM081540-01 Award Periods: 9/30/18-9/29/23, 6/30/19-6/29/24, 9/30/18-9/29/23 AL #: 93.441 U.S. Department of Health and Human Services Passed through California Rural Indian Health Board, Inc. Indian Health Services ? CRIHB 22, Indian Health Services ? CRIHB 21, COVID-19 Indian Health Services ? CRIHB 21 Award Numbers: 235-18-0004 Award Periods: 4/1/18-3/31/24 Criteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension & debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, ?Debarment and Suspension?, federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition/Context: During transactional testing, the following was noted: ? 93.441 ? 4 out of 5 vendors reviewed did not have evidence of multiple competitive bids being obtained. ? 93.243 ? 2 out of 2 vendors reviewed did not have evidence of multiple competitive bids being obtained. Additionally, there are no processes in place to check to ensure vendors are not suspended or debarred prior to conducting business. ? 93.441 - 4 out of 5 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. ? 93.243 - 2 out of 2 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The Clinic was unaware of the requirement to check vendors for suspension and debarment prior to conducting business with vendors, and there were ineffective controls in place during the period over procurement, along with lack of management oversight. Effect: The Clinic is not enacting fair competition in the procurement process nor are they following their policies by making sure bidding support is provided before the appropriate officials sign the Purchase Order. Additionally, the Clinic may be paying vendors that are suspended and debarred which would be an unallowable cost. Questioned Costs: AL#: 93.441 Known: Procurement- $42,903 AL#: 93.243 Known: Procurement- $15,380 Repeat Finding: Yes, 2021-003. Recommendation: We recommend the Clinic conduct training for staff and program managers to review the Clinic?s procurement, and suspension and debarment policies and procedures along with federal regulations. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: AL #: 93.243 U.S. Department of Health and Human Services SAMHSA Youth Programs ? Youth Tree, Youth Suicide Prevention, Youth Connections Project Award Numbers: 6H79TI081193-01, 1H79SM082124-01, 1H79SM081540-01 Award Periods: 9/30/18-9/29/23, 6/30/19-6/29/24, 9/30/18-9/29/23 AL #: 93.441 U.S. Department of Health and Human Services Passed through California Rural Indian Health Board, Inc. Indian Health Services ? CRIHB 22, Indian Health Services ? CRIHB 21, COVID-19 Indian Health Services ? CRIHB 21 Award Numbers: 235-18-0004 Award Periods: 4/1/18-3/31/24 Criteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the suspension & debarment standards set out at 2 CFR Part 180, which implements Executive Orders 12549 and 12689, ?Debarment and Suspension?, federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition/Context: During transactional testing, the following was noted: ? 93.441 ? 4 out of 5 vendors reviewed did not have evidence of multiple competitive bids being obtained. ? 93.243 ? 2 out of 2 vendors reviewed did not have evidence of multiple competitive bids being obtained. Additionally, there are no processes in place to check to ensure vendors are not suspended or debarred prior to conducting business. ? 93.441 - 4 out of 5 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. ? 93.243 - 2 out of 2 vendors reviewed did not have evidence or processes in place to check to ensure vendors were not suspended or debarred prior to conducting business. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The Clinic was unaware of the requirement to check vendors for suspension and debarment prior to conducting business with vendors, and there were ineffective controls in place during the period over procurement, along with lack of management oversight. Effect: The Clinic is not enacting fair competition in the procurement process nor are they following their policies by making sure bidding support is provided before the appropriate officials sign the Purchase Order. Additionally, the Clinic may be paying vendors that are suspended and debarred which would be an unallowable cost. Questioned Costs: AL#: 93.441 Known: Procurement- $42,903 AL#: 93.243 Known: Procurement- $15,380 Repeat Finding: Yes, 2021-003. Recommendation: We recommend the Clinic conduct training for staff and program managers to review the Clinic?s procurement, and suspension and debarment policies and procedures along with federal regulations. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Finding 2022-004 Information on the federal program: Subject: Child Nutrition Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: National School Lunch Program Assistance Listing Number: 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Procurement and Suspension and Debarment Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.214 States in part: "Non-federal entities and contractors are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 2CFR 200.318 (a) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327." (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Section III ? Federal Award Findings and Questioned Costs (Continued) FINDING 2021-004 (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) . . . if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) . . . the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. There was no documented control over procurements made under the small purchase threshold. Cause: Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not provide audit evidence that it verified that vendors which were paid $25,000 or more per school year were not excluded or disqualified from participation in federal award programs. Section III ? Federal Award Findings and Questioned Costs (Continued) FINDING 2021-004 (Continued) Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2022-004 Information on the federal program: Subject: Child Nutrition Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: National School Lunch Program Assistance Listing Number: 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Procurement and Suspension and Debarment Audit Findings: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.214 States in part: "Non-federal entities and contractors are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 2CFR 200.318 (a) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327." (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Section III ? Federal Award Findings and Questioned Costs (Continued) FINDING 2021-004 (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) . . . if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) . . . the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. There was no documented control over procurements made under the small purchase threshold. Cause: Management had not developed a system of internal control that would have ensured compliance with the grant agreement and the Reporting compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Reporting compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not provide audit evidence that it verified that vendors which were paid $25,000 or more per school year were not excluded or disqualified from participation in federal award programs. Section III ? Federal Award Findings and Questioned Costs (Continued) FINDING 2021-004 (Continued) Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Reporting compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Department of Energy, passed through Colorado Governor's Energy Office, Weatherization Assistance for Low-Income Persons/CFDA Number 81.042 for year ended June 30, 2022 Procurement Suspension & Debarment Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR section 200.320(c), Noncompetitive Procurement, establishes there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can be awarded if the item/service is available only from a single source. Condition: The Organization has a written procurement policy for the year ended June 30, 2022 which established all the requirements of 2 CFR section 200.318 through 200.326 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), including 2 CFR section 200.320(c), Noncompetitive Procurement; however, documentation of compliance with the policy was not retained for one instance of a single-source vendor for services provided. Cause: In discussing the condition with the Organization?s personnel, the vendor was considered a single source, but proper documentation to this consideration was not maintained. Effect: Noncompliance with the Uniform Guidance could jeopardize future federal funding. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 40 transactions out of 684 total transactions were selected for procurement testing. Repeat Finding from Prior Years: No. Recommendation: The Organization should ensure documentation of compliance with all the requirements of Uniform Guidance, including 2 CFR section 200.320(c), Noncompetitive Procurement. We recommend that the Organization review, approve, and document process for any vendors which would qualify for noncompetitive procurement in the future. Views of Responsible Officials: Management agrees with the finding and will implement changes through a corrective action plan to ensure proper review, approval, and documentation of procurement policy.
United States Department of Health and Human Services Pass-through from North Carolina Department of Health and Human Services Program Name: Block Grants for Prevention and Treatment of Substance Abuse Federal Assistance Listing Number - 93.959 Finding 2022-004 Significant Deficiency and Noncompliance - Procurement Criteria: All grantees that expend federal funds must comply with the procurement guidelines found in 2 CFR 200.318- .327 and use documented procurement procedures that are consistent with the applicable laws and regulations for the acquisition of property or services required under a Federal award or subaward. Condition and Context: The Organization has developed a basic purchasing policy that includes appropriate control activities; however, the policy does not include complete procurement procedures that fully align with the requirements of section 2 CFR 200.318-.327. The Organization's program expenditures for the year ended June 30, 2022 did not include purchases in excess of the Simplified Acquisition Threshold and thus informal procurement procedures were acceptable. Cause: As the Organization has only recently started receiving federal awards, they were not aware of these requirements and did not have the necesssary policies and procedures in place to comply with the procurement guidelines. Effect: Without a documented procurement policy that aligns with the requirements of 2 CFR 200.318-.327, purchases may be made under the federal program that do not comply with the relevant procurement standards established by 2 CFR 200. Recommendation: Management should formulate and adopt a procurement policy that includes the required elements of 2 CFR 200.318-.327. Views of Management: Management agrees with the finding and is implementing procedures that are further discussed in the corrective action plan. See Corrective Action Plan.
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Public and Indian Housing Assistance Listing Number: 14.850 Federal Award Identification Number and Year: FL071-00000120D, FL071-00000121D, FL071-00000122D, FL071-00000220D, FL071-00000221D, FL071-00000222D Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Authority should meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. The Entity should conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319 and 200.320. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During the testing of the Public Housing contract files, certain eligibility deficiencies were noted as summarized below: Number of Instances Finding 1 The Authority did not follow their policy with contracts that had expenses during the fiscal year as they did not go through the procurement process. 1 The Authority did not verify the vendor's eligibility regarding suspension and debarment prior to signing the agreement for services Questioned costs: Undeterminable Context: During our testing, we reviewed the contract, which contained the error noted above. The sample was a statistically valid sample. Cause: The Authority failed to have an updated procurement policy, until an updated was approved on September 20,2022, that adheres to Unform Grant Guidance. Effect: The Authority is out of compliance by not following their procurement policy. Recommendation: We recommend that the Authority update its Procurement Policy from 2009, which was done on September 30, 2022, putting in place the procedures listed in the UG and clarifying procurement methods. As well as, including in the policy that all vendors' eligibility needs to be verified prior to signing contracts, either through SAM or by collecting a certification form from the vendor. Views of responsible officials: There is no disagreement with the 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 COVID-19 ? 84.425W - American Rescue Plan School Emergency Relief Fund ? Homeless Children and Youth Federal Award Number: S425D200012 (Year: 2020), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $30,180.00 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 $3,234,746.01 were expended and reported on the Early 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 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 were not reflected within the associated contract. Therefore, expenditures totaling $30,180.00 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $30,180.00 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 COVID-19 ? 84.425W - American Rescue Plan School Emergency Relief Fund ? Homeless Children and Youth Federal Award Number: S425D200012 (Year: 2020), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $30,180.00 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 $3,234,746.01 were expended and reported on the Early 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 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 were not reflected within the associated contract. Therefore, expenditures totaling $30,180.00 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $30,180.00 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 COVID-19 ? 84.425W - American Rescue Plan School Emergency Relief Fund ? Homeless Children and Youth Federal Award Number: S425D200012 (Year: 2020), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $30,180.00 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 $3,234,746.01 were expended and reported on the Early 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 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 were not reflected within the associated contract. Therefore, expenditures totaling $30,180.00 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $30,180.00 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 COVID-19 ? 84.425W - American Rescue Plan School Emergency Relief Fund ? Homeless Children and Youth Federal Award Number: S425D200012 (Year: 2020), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $30,180.00 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 $3,234,746.01 were expended and reported on the Early 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 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 were not reflected within the associated contract. Therefore, expenditures totaling $30,180.00 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $30,180.00 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 COVID-19 ? 84.425W - American Rescue Plan School Emergency Relief Fund ? Homeless Children and Youth Federal Award Number: S425D200012 (Year: 2020), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $30,180.00 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 $3,234,746.01 were expended and reported on the Early 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 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 were not reflected within the associated contract. Therefore, expenditures totaling $30,180.00 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $30,180.00 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 COVID-19 ? 84.425W - American Rescue Plan School Emergency Relief Fund ? Homeless Children and Youth Federal Award Number: S425D200012 (Year: 2020), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $30,180.00 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 $3,234,746.01 were expended and reported on the Early 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 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 were not reflected within the associated contract. Therefore, expenditures totaling $30,180.00 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $30,180.00 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 COVID-19 ? 84.425W - American Rescue Plan School Emergency Relief Fund ? Homeless Children and Youth Federal Award Number: S425D200012 (Year: 2020), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $30,180.00 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 $3,234,746.01 were expended and reported on the Early 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 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 were not reflected within the associated contract. Therefore, expenditures totaling $30,180.00 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $30,180.00 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 COVID-19 ? 84.425W - American Rescue Plan School Emergency Relief Fund ? Homeless Children and Youth Federal Award Number: S425D200012 (Year: 2020), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $30,180.00 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 $3,234,746.01 were expended and reported on the Early 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 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 were not reflected within the associated contract. Therefore, expenditures totaling $30,180.00 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $30,180.00 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.
2022-006 Higher Education Emergency Relief Funds (HEERF) Procurement, Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program Title: HEERF Assistance Listing Number: 84.425 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: - Significant Deficiency in Internal Control Over Compliance - Other Matters Criteria or Specific Requirement: Title 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires Colleges to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the College has a written policy where institutions should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that the College did not have a procurement policy that contained certain required elements. Also, it was noted during testing that there is no written policy that requires the College to verify that vendors are suspended or debarred. Questioned Costs: None Context: The College did have appropriate documentation that met the procurement, and suspension and debarment federal requirements. However, the written policies were not in place at time of procurement or entering into contracts with vendors. Cause: The College was unaware of this federal requirement since it is their first federal grant that was nonstudent financial aid. Effect: All requirements were met, but it is also required that the policies be documented in a written form. Without written policies it is likely that required steps in the process may be missed. Repeat Finding: No Recommendation: We recommend that the College review their Procurement and Suspension and debarment policies and ensure that any missing federal requirements are included in their written policies. Views of responsible officials: There is no disagreement with the audit finding.
2022-006 Higher Education Emergency Relief Funds (HEERF) Procurement, Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program Title: HEERF Assistance Listing Number: 84.425 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: - Significant Deficiency in Internal Control Over Compliance - Other Matters Criteria or Specific Requirement: Title 2, Subtitle A, Chapter 2 Part 200, Subpart D, section 200.318 of the Code of Federal Regulations requires Colleges to have a written procurement policy that includes certain requirements as it relates to procuring good and services using federal dollars. Additionally, 2 CFR 180.995 requires that the College has a written policy where institutions should perform a check to ensure vendors are not debarred. Condition: During our testing, it was noted that the College did not have a procurement policy that contained certain required elements. Also, it was noted during testing that there is no written policy that requires the College to verify that vendors are suspended or debarred. Questioned Costs: None Context: The College did have appropriate documentation that met the procurement, and suspension and debarment federal requirements. However, the written policies were not in place at time of procurement or entering into contracts with vendors. Cause: The College was unaware of this federal requirement since it is their first federal grant that was nonstudent financial aid. Effect: All requirements were met, but it is also required that the policies be documented in a written form. Without written policies it is likely that required steps in the process may be missed. Repeat Finding: No Recommendation: We recommend that the College review their Procurement and Suspension and debarment policies and ensure that any missing federal requirements are included in their written policies. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2022-001: Procurement Federal Agency: U.S. Department of Education Pass-through agency: Pennsylvania Department of Education Assistance Listing Number: 84.425 Education Stabilization Fund 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. Furthermore, 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. Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. Context: During testing, it was noted that the District had entered into a lease agreement in 2017 to acquire computer equipment. The equipment was acquired through COSTARS, a cooperative purchasing program. While purchases through COSTARS meet the cooperative purchase requirement for local government purchasing under 62 Pa.C.S. section 1902, they do not meet the more stringent requirements of the Uniform Grant Guidance. Subsequently, the District decided to budget for and pay for this lease agreement in the 2021-2022 school year under the Education Stabilization Fund. In using federal funds to pay for the lease agreement, the District inadvertently did not follow its procurement policy. Cause: When the District initially entered into the lease agreement, they were unaware that the future cost of the lease would be paid for with federal funding. Effect: The District did not follow its procurement policy and ultimately did not comply with the standards of the Uniform Grant Guidance. Questioned Cost: None Identification of Repeat Finding: No Recommendation: We recommend that when the District decides to utilize cooperative purchasing programs and use federal funds for those purchases that a review of compliance with the procurement policy occurs. The District should then document its process and how it complies with the procurement standards. View of Responsible Officials: The District has reviewed the applicable Uniform Guidance from the Federal Office of Management and Budget and has developed administrative procedures to aid with ensuring that all procurements financed with federal funding fully comply with Uniform Grant Guidance Federal acquisition thresholds and requirements. Effective the 22-23 fiscal year forward the District will fully deploy the referenced administrative procedures to all applicable District stakeholders and monitor all such procurements for compliance purposes.
Finding 2022-001: Procurement Federal Agency: U.S. Department of Education Pass-through agency: Pennsylvania Department of Education Assistance Listing Number: 84.425 Education Stabilization Fund 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. Furthermore, 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. Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. Context: During testing, it was noted that the District had entered into a lease agreement in 2017 to acquire computer equipment. The equipment was acquired through COSTARS, a cooperative purchasing program. While purchases through COSTARS meet the cooperative purchase requirement for local government purchasing under 62 Pa.C.S. section 1902, they do not meet the more stringent requirements of the Uniform Grant Guidance. Subsequently, the District decided to budget for and pay for this lease agreement in the 2021-2022 school year under the Education Stabilization Fund. In using federal funds to pay for the lease agreement, the District inadvertently did not follow its procurement policy. Cause: When the District initially entered into the lease agreement, they were unaware that the future cost of the lease would be paid for with federal funding. Effect: The District did not follow its procurement policy and ultimately did not comply with the standards of the Uniform Grant Guidance. Questioned Cost: None Identification of Repeat Finding: No Recommendation: We recommend that when the District decides to utilize cooperative purchasing programs and use federal funds for those purchases that a review of compliance with the procurement policy occurs. The District should then document its process and how it complies with the procurement standards. View of Responsible Officials: The District has reviewed the applicable Uniform Guidance from the Federal Office of Management and Budget and has developed administrative procedures to aid with ensuring that all procurements financed with federal funding fully comply with Uniform Grant Guidance Federal acquisition thresholds and requirements. Effective the 22-23 fiscal year forward the District will fully deploy the referenced administrative procedures to all applicable District stakeholders and monitor all such procurements for compliance purposes.
Finding 2022-001: Procurement Federal Agency: U.S. Department of Education Pass-through agency: Pennsylvania Department of Education Assistance Listing Number: 84.425 Education Stabilization Fund 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. Furthermore, 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. Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. Context: During testing, it was noted that the District had entered into a lease agreement in 2017 to acquire computer equipment. The equipment was acquired through COSTARS, a cooperative purchasing program. While purchases through COSTARS meet the cooperative purchase requirement for local government purchasing under 62 Pa.C.S. section 1902, they do not meet the more stringent requirements of the Uniform Grant Guidance. Subsequently, the District decided to budget for and pay for this lease agreement in the 2021-2022 school year under the Education Stabilization Fund. In using federal funds to pay for the lease agreement, the District inadvertently did not follow its procurement policy. Cause: When the District initially entered into the lease agreement, they were unaware that the future cost of the lease would be paid for with federal funding. Effect: The District did not follow its procurement policy and ultimately did not comply with the standards of the Uniform Grant Guidance. Questioned Cost: None Identification of Repeat Finding: No Recommendation: We recommend that when the District decides to utilize cooperative purchasing programs and use federal funds for those purchases that a review of compliance with the procurement policy occurs. The District should then document its process and how it complies with the procurement standards. View of Responsible Officials: The District has reviewed the applicable Uniform Guidance from the Federal Office of Management and Budget and has developed administrative procedures to aid with ensuring that all procurements financed with federal funding fully comply with Uniform Grant Guidance Federal acquisition thresholds and requirements. Effective the 22-23 fiscal year forward the District will fully deploy the referenced administrative procedures to all applicable District stakeholders and monitor all such procurements for compliance purposes.
Finding 2022-001: Procurement Federal Agency: U.S. Department of Education Pass-through agency: Pennsylvania Department of Education Assistance Listing Number: 84.425 Education Stabilization Fund 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. Furthermore, 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. Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. Context: During testing, it was noted that the District had entered into a lease agreement in 2017 to acquire computer equipment. The equipment was acquired through COSTARS, a cooperative purchasing program. While purchases through COSTARS meet the cooperative purchase requirement for local government purchasing under 62 Pa.C.S. section 1902, they do not meet the more stringent requirements of the Uniform Grant Guidance. Subsequently, the District decided to budget for and pay for this lease agreement in the 2021-2022 school year under the Education Stabilization Fund. In using federal funds to pay for the lease agreement, the District inadvertently did not follow its procurement policy. Cause: When the District initially entered into the lease agreement, they were unaware that the future cost of the lease would be paid for with federal funding. Effect: The District did not follow its procurement policy and ultimately did not comply with the standards of the Uniform Grant Guidance. Questioned Cost: None Identification of Repeat Finding: No Recommendation: We recommend that when the District decides to utilize cooperative purchasing programs and use federal funds for those purchases that a review of compliance with the procurement policy occurs. The District should then document its process and how it complies with the procurement standards. View of Responsible Officials: The District has reviewed the applicable Uniform Guidance from the Federal Office of Management and Budget and has developed administrative procedures to aid with ensuring that all procurements financed with federal funding fully comply with Uniform Grant Guidance Federal acquisition thresholds and requirements. Effective the 22-23 fiscal year forward the District will fully deploy the referenced administrative procedures to all applicable District stakeholders and monitor all such procurements for compliance purposes.
Finding 2022-001: Procurement Federal Agency: U.S. Department of Education Pass-through agency: Pennsylvania Department of Education Assistance Listing Number: 84.425 Education Stabilization Fund 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. Furthermore, 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. Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. Context: During testing, it was noted that the District had entered into a lease agreement in 2017 to acquire computer equipment. The equipment was acquired through COSTARS, a cooperative purchasing program. While purchases through COSTARS meet the cooperative purchase requirement for local government purchasing under 62 Pa.C.S. section 1902, they do not meet the more stringent requirements of the Uniform Grant Guidance. Subsequently, the District decided to budget for and pay for this lease agreement in the 2021-2022 school year under the Education Stabilization Fund. In using federal funds to pay for the lease agreement, the District inadvertently did not follow its procurement policy. Cause: When the District initially entered into the lease agreement, they were unaware that the future cost of the lease would be paid for with federal funding. Effect: The District did not follow its procurement policy and ultimately did not comply with the standards of the Uniform Grant Guidance. Questioned Cost: None Identification of Repeat Finding: No Recommendation: We recommend that when the District decides to utilize cooperative purchasing programs and use federal funds for those purchases that a review of compliance with the procurement policy occurs. The District should then document its process and how it complies with the procurement standards. View of Responsible Officials: The District has reviewed the applicable Uniform Guidance from the Federal Office of Management and Budget and has developed administrative procedures to aid with ensuring that all procurements financed with federal funding fully comply with Uniform Grant Guidance Federal acquisition thresholds and requirements. Effective the 22-23 fiscal year forward the District will fully deploy the referenced administrative procedures to all applicable District stakeholders and monitor all such procurements for compliance purposes.
Finding 2022-001: Procurement Federal Agency: U.S. Department of Education Pass-through agency: Pennsylvania Department of Education Assistance Listing Number: 84.425 Education Stabilization Fund 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. Furthermore, 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. Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. Context: During testing, it was noted that the District had entered into a lease agreement in 2017 to acquire computer equipment. The equipment was acquired through COSTARS, a cooperative purchasing program. While purchases through COSTARS meet the cooperative purchase requirement for local government purchasing under 62 Pa.C.S. section 1902, they do not meet the more stringent requirements of the Uniform Grant Guidance. Subsequently, the District decided to budget for and pay for this lease agreement in the 2021-2022 school year under the Education Stabilization Fund. In using federal funds to pay for the lease agreement, the District inadvertently did not follow its procurement policy. Cause: When the District initially entered into the lease agreement, they were unaware that the future cost of the lease would be paid for with federal funding. Effect: The District did not follow its procurement policy and ultimately did not comply with the standards of the Uniform Grant Guidance. Questioned Cost: None Identification of Repeat Finding: No Recommendation: We recommend that when the District decides to utilize cooperative purchasing programs and use federal funds for those purchases that a review of compliance with the procurement policy occurs. The District should then document its process and how it complies with the procurement standards. View of Responsible Officials: The District has reviewed the applicable Uniform Guidance from the Federal Office of Management and Budget and has developed administrative procedures to aid with ensuring that all procurements financed with federal funding fully comply with Uniform Grant Guidance Federal acquisition thresholds and requirements. Effective the 22-23 fiscal year forward the District will fully deploy the referenced administrative procedures to all applicable District stakeholders and monitor all such procurements for compliance purposes.
2022 ? 002 ? Child Nutrition Cluster Procurement, 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 21 and FY 22 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 Suspension and debarment checks were not performed in accordance with applicable requirements on 3 out of the 6 contracts sampled. Questioned costs: None Context: Using a statistically valid sample, CLA selected 6 covered transactions for testing. 3 of the samples selected did not have a suspension and debarment certification prior to entering in a contract with the vendor. Cause: Improper understanding and implementation of existing policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the Brownsburg Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Procurement, 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 21 and FY 22 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 Suspension and debarment checks were not performed in accordance with applicable requirements on 3 out of the 6 contracts sampled. Questioned costs: None Context: Using a statistically valid sample, CLA selected 6 covered transactions for testing. 3 of the samples selected did not have a suspension and debarment certification prior to entering in a contract with the vendor. Cause: Improper understanding and implementation of existing policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the Brownsburg Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Procurement, 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 21 and FY 22 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 Suspension and debarment checks were not performed in accordance with applicable requirements on 3 out of the 6 contracts sampled. Questioned costs: None Context: Using a statistically valid sample, CLA selected 6 covered transactions for testing. 3 of the samples selected did not have a suspension and debarment certification prior to entering in a contract with the vendor. Cause: Improper understanding and implementation of existing policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the Brownsburg Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Procurement, 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 21 and FY 22 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 Suspension and debarment checks were not performed in accordance with applicable requirements on 3 out of the 6 contracts sampled. Questioned costs: None Context: Using a statistically valid sample, CLA selected 6 covered transactions for testing. 3 of the samples selected did not have a suspension and debarment certification prior to entering in a contract with the vendor. Cause: Improper understanding and implementation of existing policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the Brownsburg Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Procurement, 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 21 and FY 22 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 Suspension and debarment checks were not performed in accordance with applicable requirements on 3 out of the 6 contracts sampled. Questioned costs: None Context: Using a statistically valid sample, CLA selected 6 covered transactions for testing. 3 of the samples selected did not have a suspension and debarment certification prior to entering in a contract with the vendor. Cause: Improper understanding and implementation of existing policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the Brownsburg Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Procurement, 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 21 and FY 22 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 Suspension and debarment checks were not performed in accordance with applicable requirements on 3 out of the 6 contracts sampled. Questioned costs: None Context: Using a statistically valid sample, CLA selected 6 covered transactions for testing. 3 of the samples selected did not have a suspension and debarment certification prior to entering in a contract with the vendor. Cause: Improper understanding and implementation of existing policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the Brownsburg Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Child Nutrition Cluster Procurement, 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 21 and FY 22 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 Suspension and debarment checks were not performed in accordance with applicable requirements on 3 out of the 6 contracts sampled. Questioned costs: None Context: Using a statistically valid sample, CLA selected 6 covered transactions for testing. 3 of the samples selected did not have a suspension and debarment certification prior to entering in a contract with the vendor. Cause: Improper understanding and implementation of existing policies. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the Brownsburg Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 006 Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: FY 2021 and FY 2022 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: H027A190084, H027X210084, H173A180104, H173A210104, H173X10104 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: 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 200.2 CFR 200.303 states in part: ?The Non-Federal entity must: (e) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: During testing, it was noted that the School did not retain documentation to support compliance with federal procurement standards. Questioned costs: $146,707 Context: For 7 of 7 vendors tested, no documentation was maintained to support the method of procurement, selection of contract type, contractor selection or rejection, or the basis for the contract price. The sample was a statistically valid sample. Cause: Lack of formal procedures over federal purchase. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement or the compliance requirement could have resulted in the loss of federal funds to the School Corporation Repeat Finding: The finding is a repeat of a finding in the immediately prior audit report. Prior audit finding number was 2020-005. Recommendation: We recommend that School management establish a system of internal controls to ensure compliance with the grant agreement and procurement requirements of the procurement process. Views of responsible officials: There is no disagreement with the audit finding.