2022-002: DOCUMENTATION OF PROCUREMENT, SUSPENSION, AND DEBARMENT PROCEDURES (CODE 50000) Programs Affected ESEA: Title I School Improvement Grant, U.S. Department of Education, Federal Assistance Listing Number 84.377, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER), U.S. Department of Education, Federal Assistance Listing Number 84.425D, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER II), U.S. Department of Education, Federal Assistance Listing Number 84.425D, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER III) 80%, U.S. Department of Education, Federal Assistance Listing Number 84.425U, passed through California Department of Education, award year 2021/22, award number not available. Governor's Emergency Education Relief (GEER), U.S. Department of Education, Federal Assistance Listing Number 84.425C, passed through California Department of Education, award year 2021/22, award number not available. National School Lunch Program, U.S. Department of Agriculture, Federal Assistance Listing Number 10.555, passed through the California Department of Education, award year 2021/22, award number not available. ESEA: Title I, U.S. Department of Education, Federal Assistance Listing Number 84.010, passed through California Department of Education, award year 2021/22, award number not available. ESEA: Title IV, Part A, Student Support and Academic Enrichment, U.S. Department of Education, Federal Assistance Listing Number 84.424, passed through California Department of Education, award year 2021/22, award number not available. Criteria Title 2, Section 200.318 (2 CFR 200.318) of the Code of Federal Regulations (CFR), requires written policies and procedures regarding procurement of goods and services for federal awards. 2 CFR 200.320 requires that one of three procurement methods be used: Procurements by micro-purchases for acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (currently $10,000); Procurements by small purchase procedures, for securing goods or services that do not cost more than the Simplified Acquisition Threshold (currently $250,000); or Procurement by sealed bids, for goods and services in excess of the Simplified Acquisition Threshold. In addition, 2 CFR 200.213 requires that written procedures be in place for checking suspension and debarment status of certain vendors receiving federal funds from the District. Condition During our testing of expenditures, in which we tested 37 percent of all federal expenditures for goods and services, we noted that the District did not document procurement procedures and vendor suspension/debarment review for purchases charged to federal programs. Based on discussions with District management, they did perform procurement procedures regarding review of vendors for reasonable and best available pricing and for suspension and debarment, but these procedures were not documented in writing. None of the District's expenditures exceeded the Simplified Acquisition Threshold. No unallowable costs were noted as a result of this finding, and based on our review of vendors used for federal program expenditures, none of the vendors receiving federal funds were suspended or debarred in 2021/22. Identification of Repeat Finding This finding is a repeat of prior year Finding 2021-002. Cause The District did establish a form to document in writing the procurement and suspension and debarment procedures performed for vendors during the year, but did not implement the use of that form in 2021/22. Effect Based on review of detail of federal expenditures, there were no vendors or contractors who exceeded the Simplified Acquisition Threshold, and based on audit testing of significant vendors used by the District during the year, no vendors or contractors were noted who were suspended or debarred, and no unallowed expenditures were noted. Questioned Costs There are no questioned costs. However, the District did not document that it utilized the lowest cost vendor possible. The District has limited options available for vendors charged to its federal programs and it is unlikely that a reliable lower cost vendor would be found. Recommendation We recommend that the District implement the use of the form they have created to document review of multiple vendor quotes for services and for verifying that vendors are not suspended or debarred from receiving federal funds. We further recommend that the District update its procurement policy to include all federal programs. Views of Responsible Officials and Planned Corrective Actions The District agrees and will adhere to the corrective action plan described in the "District's Corrective Action Plan" section immediately following this section of the audit report.
2022-002: DOCUMENTATION OF PROCUREMENT, SUSPENSION, AND DEBARMENT PROCEDURES (CODE 50000) Programs Affected ESEA: Title I School Improvement Grant, U.S. Department of Education, Federal Assistance Listing Number 84.377, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER), U.S. Department of Education, Federal Assistance Listing Number 84.425D, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER II), U.S. Department of Education, Federal Assistance Listing Number 84.425D, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER III) 80%, U.S. Department of Education, Federal Assistance Listing Number 84.425U, passed through California Department of Education, award year 2021/22, award number not available. Governor's Emergency Education Relief (GEER), U.S. Department of Education, Federal Assistance Listing Number 84.425C, passed through California Department of Education, award year 2021/22, award number not available. National School Lunch Program, U.S. Department of Agriculture, Federal Assistance Listing Number 10.555, passed through the California Department of Education, award year 2021/22, award number not available. ESEA: Title I, U.S. Department of Education, Federal Assistance Listing Number 84.010, passed through California Department of Education, award year 2021/22, award number not available. ESEA: Title IV, Part A, Student Support and Academic Enrichment, U.S. Department of Education, Federal Assistance Listing Number 84.424, passed through California Department of Education, award year 2021/22, award number not available. Criteria Title 2, Section 200.318 (2 CFR 200.318) of the Code of Federal Regulations (CFR), requires written policies and procedures regarding procurement of goods and services for federal awards. 2 CFR 200.320 requires that one of three procurement methods be used: Procurements by micro-purchases for acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (currently $10,000); Procurements by small purchase procedures, for securing goods or services that do not cost more than the Simplified Acquisition Threshold (currently $250,000); or Procurement by sealed bids, for goods and services in excess of the Simplified Acquisition Threshold. In addition, 2 CFR 200.213 requires that written procedures be in place for checking suspension and debarment status of certain vendors receiving federal funds from the District. Condition During our testing of expenditures, in which we tested 37 percent of all federal expenditures for goods and services, we noted that the District did not document procurement procedures and vendor suspension/debarment review for purchases charged to federal programs. Based on discussions with District management, they did perform procurement procedures regarding review of vendors for reasonable and best available pricing and for suspension and debarment, but these procedures were not documented in writing. None of the District's expenditures exceeded the Simplified Acquisition Threshold. No unallowable costs were noted as a result of this finding, and based on our review of vendors used for federal program expenditures, none of the vendors receiving federal funds were suspended or debarred in 2021/22. Identification of Repeat Finding This finding is a repeat of prior year Finding 2021-002. Cause The District did establish a form to document in writing the procurement and suspension and debarment procedures performed for vendors during the year, but did not implement the use of that form in 2021/22. Effect Based on review of detail of federal expenditures, there were no vendors or contractors who exceeded the Simplified Acquisition Threshold, and based on audit testing of significant vendors used by the District during the year, no vendors or contractors were noted who were suspended or debarred, and no unallowed expenditures were noted. Questioned Costs There are no questioned costs. However, the District did not document that it utilized the lowest cost vendor possible. The District has limited options available for vendors charged to its federal programs and it is unlikely that a reliable lower cost vendor would be found. Recommendation We recommend that the District implement the use of the form they have created to document review of multiple vendor quotes for services and for verifying that vendors are not suspended or debarred from receiving federal funds. We further recommend that the District update its procurement policy to include all federal programs. Views of Responsible Officials and Planned Corrective Actions The District agrees and will adhere to the corrective action plan described in the "District's Corrective Action Plan" section immediately following this section of the audit report.
2022-002: DOCUMENTATION OF PROCUREMENT, SUSPENSION, AND DEBARMENT PROCEDURES (CODE 50000) Programs Affected ESEA: Title I School Improvement Grant, U.S. Department of Education, Federal Assistance Listing Number 84.377, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER), U.S. Department of Education, Federal Assistance Listing Number 84.425D, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER II), U.S. Department of Education, Federal Assistance Listing Number 84.425D, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER III) 80%, U.S. Department of Education, Federal Assistance Listing Number 84.425U, passed through California Department of Education, award year 2021/22, award number not available. Governor's Emergency Education Relief (GEER), U.S. Department of Education, Federal Assistance Listing Number 84.425C, passed through California Department of Education, award year 2021/22, award number not available. National School Lunch Program, U.S. Department of Agriculture, Federal Assistance Listing Number 10.555, passed through the California Department of Education, award year 2021/22, award number not available. ESEA: Title I, U.S. Department of Education, Federal Assistance Listing Number 84.010, passed through California Department of Education, award year 2021/22, award number not available. ESEA: Title IV, Part A, Student Support and Academic Enrichment, U.S. Department of Education, Federal Assistance Listing Number 84.424, passed through California Department of Education, award year 2021/22, award number not available. Criteria Title 2, Section 200.318 (2 CFR 200.318) of the Code of Federal Regulations (CFR), requires written policies and procedures regarding procurement of goods and services for federal awards. 2 CFR 200.320 requires that one of three procurement methods be used: Procurements by micro-purchases for acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (currently $10,000); Procurements by small purchase procedures, for securing goods or services that do not cost more than the Simplified Acquisition Threshold (currently $250,000); or Procurement by sealed bids, for goods and services in excess of the Simplified Acquisition Threshold. In addition, 2 CFR 200.213 requires that written procedures be in place for checking suspension and debarment status of certain vendors receiving federal funds from the District. Condition During our testing of expenditures, in which we tested 37 percent of all federal expenditures for goods and services, we noted that the District did not document procurement procedures and vendor suspension/debarment review for purchases charged to federal programs. Based on discussions with District management, they did perform procurement procedures regarding review of vendors for reasonable and best available pricing and for suspension and debarment, but these procedures were not documented in writing. None of the District's expenditures exceeded the Simplified Acquisition Threshold. No unallowable costs were noted as a result of this finding, and based on our review of vendors used for federal program expenditures, none of the vendors receiving federal funds were suspended or debarred in 2021/22. Identification of Repeat Finding This finding is a repeat of prior year Finding 2021-002. Cause The District did establish a form to document in writing the procurement and suspension and debarment procedures performed for vendors during the year, but did not implement the use of that form in 2021/22. Effect Based on review of detail of federal expenditures, there were no vendors or contractors who exceeded the Simplified Acquisition Threshold, and based on audit testing of significant vendors used by the District during the year, no vendors or contractors were noted who were suspended or debarred, and no unallowed expenditures were noted. Questioned Costs There are no questioned costs. However, the District did not document that it utilized the lowest cost vendor possible. The District has limited options available for vendors charged to its federal programs and it is unlikely that a reliable lower cost vendor would be found. Recommendation We recommend that the District implement the use of the form they have created to document review of multiple vendor quotes for services and for verifying that vendors are not suspended or debarred from receiving federal funds. We further recommend that the District update its procurement policy to include all federal programs. Views of Responsible Officials and Planned Corrective Actions The District agrees and will adhere to the corrective action plan described in the "District's Corrective Action Plan" section immediately following this section of the audit report.
2022-002: DOCUMENTATION OF PROCUREMENT, SUSPENSION, AND DEBARMENT PROCEDURES (CODE 50000) Programs Affected ESEA: Title I School Improvement Grant, U.S. Department of Education, Federal Assistance Listing Number 84.377, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER), U.S. Department of Education, Federal Assistance Listing Number 84.425D, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER II), U.S. Department of Education, Federal Assistance Listing Number 84.425D, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER III) 80%, U.S. Department of Education, Federal Assistance Listing Number 84.425U, passed through California Department of Education, award year 2021/22, award number not available. Governor's Emergency Education Relief (GEER), U.S. Department of Education, Federal Assistance Listing Number 84.425C, passed through California Department of Education, award year 2021/22, award number not available. National School Lunch Program, U.S. Department of Agriculture, Federal Assistance Listing Number 10.555, passed through the California Department of Education, award year 2021/22, award number not available. ESEA: Title I, U.S. Department of Education, Federal Assistance Listing Number 84.010, passed through California Department of Education, award year 2021/22, award number not available. ESEA: Title IV, Part A, Student Support and Academic Enrichment, U.S. Department of Education, Federal Assistance Listing Number 84.424, passed through California Department of Education, award year 2021/22, award number not available. Criteria Title 2, Section 200.318 (2 CFR 200.318) of the Code of Federal Regulations (CFR), requires written policies and procedures regarding procurement of goods and services for federal awards. 2 CFR 200.320 requires that one of three procurement methods be used: Procurements by micro-purchases for acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (currently $10,000); Procurements by small purchase procedures, for securing goods or services that do not cost more than the Simplified Acquisition Threshold (currently $250,000); or Procurement by sealed bids, for goods and services in excess of the Simplified Acquisition Threshold. In addition, 2 CFR 200.213 requires that written procedures be in place for checking suspension and debarment status of certain vendors receiving federal funds from the District. Condition During our testing of expenditures, in which we tested 37 percent of all federal expenditures for goods and services, we noted that the District did not document procurement procedures and vendor suspension/debarment review for purchases charged to federal programs. Based on discussions with District management, they did perform procurement procedures regarding review of vendors for reasonable and best available pricing and for suspension and debarment, but these procedures were not documented in writing. None of the District's expenditures exceeded the Simplified Acquisition Threshold. No unallowable costs were noted as a result of this finding, and based on our review of vendors used for federal program expenditures, none of the vendors receiving federal funds were suspended or debarred in 2021/22. Identification of Repeat Finding This finding is a repeat of prior year Finding 2021-002. Cause The District did establish a form to document in writing the procurement and suspension and debarment procedures performed for vendors during the year, but did not implement the use of that form in 2021/22. Effect Based on review of detail of federal expenditures, there were no vendors or contractors who exceeded the Simplified Acquisition Threshold, and based on audit testing of significant vendors used by the District during the year, no vendors or contractors were noted who were suspended or debarred, and no unallowed expenditures were noted. Questioned Costs There are no questioned costs. However, the District did not document that it utilized the lowest cost vendor possible. The District has limited options available for vendors charged to its federal programs and it is unlikely that a reliable lower cost vendor would be found. Recommendation We recommend that the District implement the use of the form they have created to document review of multiple vendor quotes for services and for verifying that vendors are not suspended or debarred from receiving federal funds. We further recommend that the District update its procurement policy to include all federal programs. Views of Responsible Officials and Planned Corrective Actions The District agrees and will adhere to the corrective action plan described in the "District's Corrective Action Plan" section immediately following this section of the audit report.
2022-002: DOCUMENTATION OF PROCUREMENT, SUSPENSION, AND DEBARMENT PROCEDURES (CODE 50000) Programs Affected ESEA: Title I School Improvement Grant, U.S. Department of Education, Federal Assistance Listing Number 84.377, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER), U.S. Department of Education, Federal Assistance Listing Number 84.425D, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER II), U.S. Department of Education, Federal Assistance Listing Number 84.425D, passed through California Department of Education, award year 2021/22, award number not available. Elementary and Secondary Emergency Relief (ESSER III) 80%, U.S. Department of Education, Federal Assistance Listing Number 84.425U, passed through California Department of Education, award year 2021/22, award number not available. Governor's Emergency Education Relief (GEER), U.S. Department of Education, Federal Assistance Listing Number 84.425C, passed through California Department of Education, award year 2021/22, award number not available. National School Lunch Program, U.S. Department of Agriculture, Federal Assistance Listing Number 10.555, passed through the California Department of Education, award year 2021/22, award number not available. ESEA: Title I, U.S. Department of Education, Federal Assistance Listing Number 84.010, passed through California Department of Education, award year 2021/22, award number not available. ESEA: Title IV, Part A, Student Support and Academic Enrichment, U.S. Department of Education, Federal Assistance Listing Number 84.424, passed through California Department of Education, award year 2021/22, award number not available. Criteria Title 2, Section 200.318 (2 CFR 200.318) of the Code of Federal Regulations (CFR), requires written policies and procedures regarding procurement of goods and services for federal awards. 2 CFR 200.320 requires that one of three procurement methods be used: Procurements by micro-purchases for acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (currently $10,000); Procurements by small purchase procedures, for securing goods or services that do not cost more than the Simplified Acquisition Threshold (currently $250,000); or Procurement by sealed bids, for goods and services in excess of the Simplified Acquisition Threshold. In addition, 2 CFR 200.213 requires that written procedures be in place for checking suspension and debarment status of certain vendors receiving federal funds from the District. Condition During our testing of expenditures, in which we tested 37 percent of all federal expenditures for goods and services, we noted that the District did not document procurement procedures and vendor suspension/debarment review for purchases charged to federal programs. Based on discussions with District management, they did perform procurement procedures regarding review of vendors for reasonable and best available pricing and for suspension and debarment, but these procedures were not documented in writing. None of the District's expenditures exceeded the Simplified Acquisition Threshold. No unallowable costs were noted as a result of this finding, and based on our review of vendors used for federal program expenditures, none of the vendors receiving federal funds were suspended or debarred in 2021/22. Identification of Repeat Finding This finding is a repeat of prior year Finding 2021-002. Cause The District did establish a form to document in writing the procurement and suspension and debarment procedures performed for vendors during the year, but did not implement the use of that form in 2021/22. Effect Based on review of detail of federal expenditures, there were no vendors or contractors who exceeded the Simplified Acquisition Threshold, and based on audit testing of significant vendors used by the District during the year, no vendors or contractors were noted who were suspended or debarred, and no unallowed expenditures were noted. Questioned Costs There are no questioned costs. However, the District did not document that it utilized the lowest cost vendor possible. The District has limited options available for vendors charged to its federal programs and it is unlikely that a reliable lower cost vendor would be found. Recommendation We recommend that the District implement the use of the form they have created to document review of multiple vendor quotes for services and for verifying that vendors are not suspended or debarred from receiving federal funds. We further recommend that the District update its procurement policy to include all federal programs. Views of Responsible Officials and Planned Corrective Actions The District agrees and will adhere to the corrective action plan described in the "District's Corrective Action Plan" section immediately following this section of the audit report.
Criteria In accordance with 2 CFR section 200.319(c), non-federal entities must have written procedures for procurement transactions. Such policy should incorporate all requirements within 2 CFR section 200.318 through 200.326 of the Uniform Guidance. Conditions For the year ended June 30, 2022, the Town of Yoder, Wyoming did not have a written procurement policy implemented with 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). Cause The Town of Yoder, Wyoming has a small staff with the lack of understanding of the requirements. Effect or Potential Effect Lack of a formal, documented procurement policy may result in noncompliance with federal and state statutes, regulations, or other laws. Questioned Costs There were no questioned costs identified, as the parties involved in these covered transactions were neither suspended nor debarred. Context This was identified through inquiry of management and review of the Town of Yoder, Wyoming?s policies. Recommendations We recommend that the Town of Yoder, Wyoming implement a formal, written policy with the requirements of 2 CFR section 200.318 through 200.326 of the Uniform Guidance.
Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grant Program Assistance Listing Number: 14.231 Pass-Through Agencies: State of Connecticut Department of Housing and City of New Haven, Connecticut Pass-Through Numbers: CAPO 60210084, CAPO 40220089, and CAPO 40210089 Award Period: Various dates ending between May 18, 2022 and September 30, 2022 Type of Finding: * Significant Deficiency in Internal Control over Compliance * Material Noncompliance (Modified Opinion) Criteria or specific requirement: The Organization must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The Organization?s procurement policy does not include the essential restrictive terminology requirements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted Context: Although the Organization did not have a policy in place with the restrictive terminology requirements as detailed in Uniform Guidance, the Organization did follow the federal procedures as it relates to the contracts under the procurements applicable to the Organization?s major program. Cause: The Organization was unaware of the restrictive terminology requirements required as part of the new procurement standards. Effect: With the absence of a compliant policy, the Organization is at risk for noncompliance as it relates to federal procurement. Repeat Finding: This was not a repeat finding. Recommendation: We recommend that the Organization review its formal procurement policies and make necessary changes to comply with the terminology requirements as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grant Program Assistance Listing Number: 14.231 Pass-Through Agencies: State of Connecticut Department of Housing and City of New Haven, Connecticut Pass-Through Numbers: CAPO 60210084, CAPO 40220089, and CAPO 40210089 Award Period: Various dates ending between May 18, 2022 and September 30, 2022 Type of Finding: * Significant Deficiency in Internal Control over Compliance * Material Noncompliance (Modified Opinion) Criteria or specific requirement: The Organization must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The Organization?s procurement policy does not include the essential restrictive terminology requirements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted Context: Although the Organization did not have a policy in place with the restrictive terminology requirements as detailed in Uniform Guidance, the Organization did follow the federal procedures as it relates to the contracts under the procurements applicable to the Organization?s major program. Cause: The Organization was unaware of the restrictive terminology requirements required as part of the new procurement standards. Effect: With the absence of a compliant policy, the Organization is at risk for noncompliance as it relates to federal procurement. Repeat Finding: This was not a repeat finding. Recommendation: We recommend that the Organization review its formal procurement policies and make necessary changes to comply with the terminology requirements as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grant Program Assistance Listing Number: 14.231 Pass-Through Agencies: State of Connecticut Department of Housing and City of New Haven, Connecticut Pass-Through Numbers: CAPO 60210084, CAPO 40220089, and CAPO 40210089 Award Period: Various dates ending between May 18, 2022 and September 30, 2022 Type of Finding: * Significant Deficiency in Internal Control over Compliance * Material Noncompliance (Modified Opinion) Criteria or specific requirement: The Organization must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The Organization?s procurement policy does not include the essential restrictive terminology requirements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted Context: Although the Organization did not have a policy in place with the restrictive terminology requirements as detailed in Uniform Guidance, the Organization did follow the federal procedures as it relates to the contracts under the procurements applicable to the Organization?s major program. Cause: The Organization was unaware of the restrictive terminology requirements required as part of the new procurement standards. Effect: With the absence of a compliant policy, the Organization is at risk for noncompliance as it relates to federal procurement. Repeat Finding: This was not a repeat finding. Recommendation: We recommend that the Organization review its formal procurement policies and make necessary changes to comply with the terminology requirements as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grant Program Assistance Listing Number: 14.231 Pass-Through Agencies: State of Connecticut Department of Housing and City of New Haven, Connecticut Pass-Through Numbers: CAPO 60210084, CAPO 40220089, and CAPO 40210089 Award Period: Various dates ending between May 18, 2022 and September 30, 2022 Type of Finding: * Significant Deficiency in Internal Control over Compliance * Material Noncompliance (Modified Opinion) Criteria or specific requirement: The Organization must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The Organization?s procurement policy does not include the essential restrictive terminology requirements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted Context: Although the Organization did not have a policy in place with the restrictive terminology requirements as detailed in Uniform Guidance, the Organization did follow the federal procedures as it relates to the contracts under the procurements applicable to the Organization?s major program. Cause: The Organization was unaware of the restrictive terminology requirements required as part of the new procurement standards. Effect: With the absence of a compliant policy, the Organization is at risk for noncompliance as it relates to federal procurement. Repeat Finding: This was not a repeat finding. Recommendation: We recommend that the Organization review its formal procurement policies and make necessary changes to comply with the terminology requirements as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grant Program Assistance Listing Number: 14.231 Pass-Through Agencies: State of Connecticut Department of Housing and City of New Haven, Connecticut Pass-Through Numbers: CAPO 60210084, CAPO 40220089, and CAPO 40210089 Award Period: Various dates ending between May 18, 2022 and September 30, 2022 Type of Finding: * Significant Deficiency in Internal Control over Compliance * Material Noncompliance (Modified Opinion) Criteria or specific requirement: The Organization must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The Organization?s procurement policy does not include the essential restrictive terminology requirements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted Context: Although the Organization did not have a policy in place with the restrictive terminology requirements as detailed in Uniform Guidance, the Organization did follow the federal procedures as it relates to the contracts under the procurements applicable to the Organization?s major program. Cause: The Organization was unaware of the restrictive terminology requirements required as part of the new procurement standards. Effect: With the absence of a compliant policy, the Organization is at risk for noncompliance as it relates to federal procurement. Repeat Finding: This was not a repeat finding. Recommendation: We recommend that the Organization review its formal procurement policies and make necessary changes to comply with the terminology requirements as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grant Program Assistance Listing Number: 14.231 Pass-Through Agencies: State of Connecticut Department of Housing and City of New Haven, Connecticut Pass-Through Numbers: CAPO 60210084, CAPO 40220089, and CAPO 40210089 Award Period: Various dates ending between May 18, 2022 and September 30, 2022 Type of Finding: * Significant Deficiency in Internal Control over Compliance * Material Noncompliance (Modified Opinion) Criteria or specific requirement: The Organization must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The Organization?s procurement policy does not include the essential restrictive terminology requirements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted Context: Although the Organization did not have a policy in place with the restrictive terminology requirements as detailed in Uniform Guidance, the Organization did follow the federal procedures as it relates to the contracts under the procurements applicable to the Organization?s major program. Cause: The Organization was unaware of the restrictive terminology requirements required as part of the new procurement standards. Effect: With the absence of a compliant policy, the Organization is at risk for noncompliance as it relates to federal procurement. Repeat Finding: This was not a repeat finding. Recommendation: We recommend that the Organization review its formal procurement policies and make necessary changes to comply with the terminology requirements as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grant Program Assistance Listing Number: 14.231 Pass-Through Agencies: State of Connecticut Department of Housing and City of New Haven, Connecticut Pass-Through Numbers: CAPO 60210084, CAPO 40220089, and CAPO 40210089 Award Period: Various dates ending between May 18, 2022 and September 30, 2022 Type of Finding: * Significant Deficiency in Internal Control over Compliance * Material Noncompliance (Modified Opinion) Criteria or specific requirement: The Organization must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The Organization?s procurement policy does not include the essential restrictive terminology requirements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted Context: Although the Organization did not have a policy in place with the restrictive terminology requirements as detailed in Uniform Guidance, the Organization did follow the federal procedures as it relates to the contracts under the procurements applicable to the Organization?s major program. Cause: The Organization was unaware of the restrictive terminology requirements required as part of the new procurement standards. Effect: With the absence of a compliant policy, the Organization is at risk for noncompliance as it relates to federal procurement. Repeat Finding: This was not a repeat finding. Recommendation: We recommend that the Organization review its formal procurement policies and make necessary changes to comply with the terminology requirements as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S Department of Housing and Urban Development Federal Program Name: Emergency Solutions Grant Program Assistance Listing Number: 14.231 Pass-Through Agencies: State of Connecticut Department of Housing and City of New Haven, Connecticut Pass-Through Numbers: CAPO 60210084, CAPO 40220089, and CAPO 40210089 Award Period: Various dates ending between May 18, 2022 and September 30, 2022 Type of Finding: * Significant Deficiency in Internal Control over Compliance * Material Noncompliance (Modified Opinion) Criteria or specific requirement: The Organization must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The Organization?s procurement policy does not include the essential restrictive terminology requirements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None noted Context: Although the Organization did not have a policy in place with the restrictive terminology requirements as detailed in Uniform Guidance, the Organization did follow the federal procedures as it relates to the contracts under the procurements applicable to the Organization?s major program. Cause: The Organization was unaware of the restrictive terminology requirements required as part of the new procurement standards. Effect: With the absence of a compliant policy, the Organization is at risk for noncompliance as it relates to federal procurement. Repeat Finding: This was not a repeat finding. Recommendation: We recommend that the Organization review its formal procurement policies and make necessary changes to comply with the terminology requirements as set out in 2 CFR sections 200.318 and 200.326. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2022-004 Information on the federal program: Subject: Special Education Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Cluster Assistance Listing Number: 84.027 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with ? 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids (2) Proposals Section III ? Federal Award Findings and Questioned Costs (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not perform a formal procurement when the School Corporation signed a contract with the service provider in July 2017. Additionally, the contract was extended in February 2019 through June 30, 2029 without a formal procurement process. The School Corporation did not have procedures in place to ensure the service provider was not debarred or suspended when the original contracts and amendments were signed. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement procedures to ensure compliance with the grant agreement requirements and the procurement and suspension and debarment compliance requirement. 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: Special Education Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Cluster Assistance Listing Number: 84.027 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with ? 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids (2) Proposals Section III ? Federal Award Findings and Questioned Costs (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not perform a formal procurement when the School Corporation signed a contract with the service provider in July 2017. Additionally, the contract was extended in February 2019 through June 30, 2029 without a formal procurement process. The School Corporation did not have procedures in place to ensure the service provider was not debarred or suspended when the original contracts and amendments were signed. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement procedures to ensure compliance with the grant agreement requirements and the procurement and suspension and debarment compliance requirement. 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: Special Education Cluster ? Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Cluster Assistance Listing Number: 84.027 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with ? 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids (2) Proposals Section III ? Federal Award Findings and Questioned Costs (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system enabled noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not perform a formal procurement when the School Corporation signed a contract with the service provider in July 2017. Additionally, the contract was extended in February 2019 through June 30, 2029 without a formal procurement process. The School Corporation did not have procedures in place to ensure the service provider was not debarred or suspended when the original contracts and amendments were signed. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement procedures to ensure compliance with the grant agreement requirements and the procurement and suspension and debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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 micropurchase 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 and a contract must be entered into when the total cost exceeds $50,000. The School Corporation did not enter into contracts with vendors for purchases in excess of $50,000 as required by state statute for three of the six vendors tested. As a result, the School Corporation did not verify that these vendors were not excluded or disqualified from participation in federal assistance programs or activities. In addition to the three vendors noted above, the School Corporation did not verify that vendors with contracts over $25,000 were not excluded or disqualified from participation in federal award programs for fiscal year 2021-2022. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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(a) (Uniform Guidance) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) If the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 17 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-001 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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 micropurchase 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 and a contract must be entered into when the total cost exceeds $50,000. The School Corporation did not enter into contracts with vendors for purchases in excess of $50,000 as required by state statute for three of the six vendors tested. As a result, the School Corporation did not verify that these vendors were not excluded or disqualified from participation in federal assistance programs or activities. In addition to the three vendors noted above, the School Corporation did not verify that vendors with contracts over $25,000 were not excluded or disqualified from participation in federal award programs for fiscal year 2021-2022. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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(a) (Uniform Guidance) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) If the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 17 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-001 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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 micropurchase 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 and a contract must be entered into when the total cost exceeds $50,000. The School Corporation did not enter into contracts with vendors for purchases in excess of $50,000 as required by state statute for three of the six vendors tested. As a result, the School Corporation did not verify that these vendors were not excluded or disqualified from participation in federal assistance programs or activities. In addition to the three vendors noted above, the School Corporation did not verify that vendors with contracts over $25,000 were not excluded or disqualified from participation in federal award programs for fiscal year 2021-2022. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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(a) (Uniform Guidance) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) If the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 17 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-001 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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 micropurchase 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 and a contract must be entered into when the total cost exceeds $50,000. The School Corporation did not enter into contracts with vendors for purchases in excess of $50,000 as required by state statute for three of the six vendors tested. As a result, the School Corporation did not verify that these vendors were not excluded or disqualified from participation in federal assistance programs or activities. In addition to the three vendors noted above, the School Corporation did not verify that vendors with contracts over $25,000 were not excluded or disqualified from participation in federal award programs for fiscal year 2021-2022. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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(a) (Uniform Guidance) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) If the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 17 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-001 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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 micropurchase 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 and a contract must be entered into when the total cost exceeds $50,000. The School Corporation did not enter into contracts with vendors for purchases in excess of $50,000 as required by state statute for three of the six vendors tested. As a result, the School Corporation did not verify that these vendors were not excluded or disqualified from participation in federal assistance programs or activities. In addition to the three vendors noted above, the School Corporation did not verify that vendors with contracts over $25,000 were not excluded or disqualified from participation in federal award programs for fiscal year 2021-2022. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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(a) (Uniform Guidance) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) If the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 17 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-001 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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 micropurchase 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 and a contract must be entered into when the total cost exceeds $50,000. The School Corporation did not enter into contracts with vendors for purchases in excess of $50,000 as required by state statute for three of the six vendors tested. As a result, the School Corporation did not verify that these vendors were not excluded or disqualified from participation in federal assistance programs or activities. In addition to the three vendors noted above, the School Corporation did not verify that vendors with contracts over $25,000 were not excluded or disqualified from participation in federal award programs for fiscal year 2021-2022. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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(a) (Uniform Guidance) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non- Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) If the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 17 WARSAW COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-002 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, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control 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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. 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. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. 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." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 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. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) if the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-002 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, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control 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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. 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. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. 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." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 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. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) if the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-002 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, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control 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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. 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. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. 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." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 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. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) if the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-002 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, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control 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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. 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. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. 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." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 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. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) if the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-002 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, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control 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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. 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. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. 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." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 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. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) if the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-002 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, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control 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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. 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. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. 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." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 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. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) if the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-002 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, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control 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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. 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. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. 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." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 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. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) if the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-002 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, Summer Food Service Program, COVID-19 - Summer Food Service Program Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY20-21, FY21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control 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. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Indiana Code also requires any small purchase above $50,000 must be awarded a contract. INDIANA STATE BOARD OF ACCOUNTS 20 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Small Purchases During fiscal year 2020-2021, the School Corporation purchased food and supply items from four vendors with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. Two of the four vendors were above $50,000 and a contract was not awarded. During 2021-2022, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold without obtaining quotes or providing full and open competition. A contract was not awarded to this vendor. There was no documentation available to support the rationale to limit competition. 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. During 2020-2021 and 2021-2022, the School Corporation entered into a covered transaction with the Commercial Food Systems. They did not follow its procedures to ensure that the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in Federal assistance programs or activities. 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." INDIANA STATE BOARD OF ACCOUNTS 21 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.320(b) (Uniform Guidance) states: "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." 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. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only 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) if the purchasing agent receives a satisfactory quote, 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: INDIANA STATE BOARD OF ACCOUNTS 22 EAST WASHINGTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 developed nor implemented a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment 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 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. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with 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.
FINDING 2022-004 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, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls 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. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. 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: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (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. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls 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. 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.
FINDING 2022-004 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, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls 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. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. 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: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (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. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls 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. 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.
FINDING 2022-004 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, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls 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. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. 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: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (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. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls 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. 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.
FINDING 2022-004 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, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls 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. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. 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: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (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. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls 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. 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.
FINDING 2022-004 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, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls 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. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. 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: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (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. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls 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. 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.
FINDING 2022-004 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, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls 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. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. 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: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (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. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls 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. 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.
FINDING 2022-004 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, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls 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. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. 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: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (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. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls 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. 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.
FINDING 2022-004 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, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls 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. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. 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: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (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. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls 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. 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.
FINDING 2022-004 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, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 27 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-012. Condition and Context An effective system of internal controls 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. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000. 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. The School Corporation did not have internal controls in place to ensure the purchasing method used complied with federal and state requirements. The School Corporation did not obtain price or rate quotes for two vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The micropurchase threshold may be increased, but the School Corporation did not provide documentation that the threshold had been increased. The School Corporation did not obtain a contract for these two vendors as required by Indiana Code for purchases between $50,000 and $150,000. Additionally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for both purchases made using the small purchases and micro-purchases procurement methods. Suspension and Debarment There were no internal controls in place to ensure that vendors were not suspended or debarred from participation in federal programs. The School Corporation did not perform any procedures to verify that vendors paid with federal grant monies were not suspended or debarred from participation in federal programs before entering into a covered transaction. 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: INDIANA STATE BOARD OF ACCOUNTS 28 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in ?? 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 (Uniform Guidance) states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (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. . . ." 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 29 SCOTT COUNTY SCHOOL DISTRICT 2 SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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." Cause Management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect The failure to establish an effective system of internal controls 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. 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.
2022-001 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 goods and services using federal dollars. Additionally, 2 CFR 180.995 requires that the College has a written policy where Colleges 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 nor did they perform all the required procurement procedures related to the HEERF expenditures. Also, it was noted during testing that there is no written policy that requires the College to verify that vendors are suspended or debarred nor did they perform any procedures related to the HEERF expenditures on such vendors. Questioned Costs: None Context: The College did not have appropriate documentation that met the procurement, and suspension and debarment federal requirements. Furthermore, they did not have written policies in place at time of procurement or entering into contracts with vendors that aligned with the uniform guidance. Cause: The College was unaware of this federal requirement since it is their first federal grant that was non-student 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.
2022-001 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 goods and services using federal dollars. Additionally, 2 CFR 180.995 requires that the College has a written policy where Colleges 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 nor did they perform all the required procurement procedures related to the HEERF expenditures. Also, it was noted during testing that there is no written policy that requires the College to verify that vendors are suspended or debarred nor did they perform any procedures related to the HEERF expenditures on such vendors. Questioned Costs: None Context: The College did not have appropriate documentation that met the procurement, and suspension and debarment federal requirements. Furthermore, they did not have written policies in place at time of procurement or entering into contracts with vendors that aligned with the uniform guidance. Cause: The College was unaware of this federal requirement since it is their first federal grant that was non-student 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.
Federal Agency: U.S. Department of Education Federal Program Title: COVID-19 Education Stabilization Fund ? Higher Education Emergency Relief Fund - Institutional Portion (Assistance Listing No. 84.425F)Grant Award Period: July 1, 2021 through June 30, 2022 Grant Identification Numbers: P425F203954 ? 20A Compliance Requirement: Procurement, Suspension and Debarment Criteria: 2 CFR 200.318(a) requires the non-Federal entity to 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. The non-Federal entity?s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200.214 states that non-Federal entities are subject to the non-procurement debarment and suspension regulations implemented at 2 CFR 180.300. 2 CFR 180.300 specifies that before entering into a covered transaction with another person at the next lower tier, the entity must verify that the counterparty with whom they intend to do business is not excluded or disqualified. 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure compliance with procurement, suspension and debarment standards. Conditions Found: During the audit, it was identified that the College did not have a procurement policy in order to comply with 2 CFR 200.318(a). As a result of the lack of a policy, expenditures were made that were not in compliance with the procurement requirements of 2 CFR 200.317 through 2 CFR 200.327. Additionally, it was identified that the College did not obtain evidence that the expenditures made during the period were in compliance with the suspension and debarment requirements of 2 CFR 200.214 and 2 CFR 180.300. Further, it was identified that the College did not have effective internal controls over procurement, suspension and debarment in accordance with 2 CFR 200.303. Total expenditures for 84.425F that were subject to procurement, suspension and debarment compliance requirements were $847,652. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: Not determinable Repeat Finding: This finding is a repeat finding in the immediately prior audit. In the prior year, this was reported as finding 2021-001. Cause and Effect: The College did not perform procedures to evidence that the transactions entered into were with counterparties which met the requirements of 2 CFR 200.214 and 2 CFR 180.300. The College did not have an effective system of internal control in place to ensure the procurement, suspension and debarment compliance requirements in 2 CFR 200.317 through 200.327 and 2 CFR 200.214 and 2 CFR 180.300. The College does not typically expend federal awards that are subject to the Uniform Guidance procurement requirements, and as such, management did not have policies in place prior to receiving these federal awards to comply with procurement, suspension and debarment compliance requirements. In response to the prior year finding, management is in process of implementing procurement policies to meet the requirements of 2 CFR sections 200.317 through 200.327. Recommendation: We recommend the College enhance its internal control to ensure that the College has a policy and effective internal controls in place to ensure that the College conforms to required federal procurement, suspension and debarment procedures. View of Responsible Officials: We concur with the finding and are in the process of finalizing policies and procedures to comply with procurement, suspension and debarment standards. Beginning in April 2022, in response to the prior year finding, the College began to ensure vendors were not suspended and debarred for all HEERF funds, including reviewing prior vendors with which HEERF funds were expended. Further, management began obtaining quotes for certain purchases that are being reimbursed by HEERF funds. Consistent with our corrective action plan, we implemented formal written policies and procedures during fiscal year 2023.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Rural eConnectivity Pilot Program Assistance Listing Number: 10.752 Federal Award Identification Number and Year: MD 1701-A64, 2020 Award Period: July 1, 2020 ? July 1, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2CFR ? 200.318(a), non-Federal entities 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. Questioned Costs: None Condition/Context: The Commission?s procurement policy for federal expenditures is not in accordance with ?? 200.317 through 200.327. Cause/Effect: The Commission does not have sufficient documented policies and procedures over procurement to ensure federal procurement requirements are met. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Commission establish and document procurement policies and procedures in conformity with the Federal requirements ?? 200.317 through 200.327. Views of responsible officials: Management agrees with the finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE ? ALL FEDERAL PROGRAMS AWARDED UNDER THE UNIFORM GUIDANCE 2022-001 Internal Controls Over Compliance With Cash Management, Allowable Costs, Standards for Financial Management, and Procurement Criteria ? 2 CFR ? 200.302(b)(5), (6), and (7) requires Universal Academy (the Academy) to have written cash management procedures, which includes procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E ? Cost Principles, as well as a required written budget to actual comparison of expenditures for each federal award. 2 CFR 200.318(a) requires the Academy to have documented written procurement procedures, which reflect applicable state and local laws, provided they conform to applicable federal laws. 2 CFR 200.318(c) and 48 CFR 52.203-13 require documented written standards of conduct that cover conflicts of interest and govern the performance of employees engaged in the selection, award, and administration of contracts. Condition ? During our audit, we noted that the Academy?s written internal control policies over compliance with the U.S. Office of Management and Budget?s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) did not include adequate written controls over compliance with cash management, allowable costs, financial management standards, and procurement. Questioned Costs ? None. Our testing did not indicate any instances of noncompliance. Context ? The lack of written controls pertains to all federal grants. This was not a statistically valid sample. Repeat Finding ? This is a current year and prior year finding. Cause ? The Academy?s required Uniform Guidance written internal control policies for compliance over federal awards do not adequately address some required internal control policies, including cash management, allowable costs, financial management, and procurement. Effect ? This could be viewed as a violation of the award agreement. Recommendation ? We recommend that the Academy review its internal control procedures relating to cash management, allowable costs, financial management, and procurement for all federal programs. The Academy should review the new Uniform Guidance to obtain a better understanding of the requirements and identify any needed policy and procedure changes, in addition to those already referenced above. We also recommend the Academy adopt written policies pertaining to cash management, allowable costs, financial management, and procurement for all federal programs. The Academy should also document and perform regular budget to actual comparison of expenditures for each federal award. View of Responsible Official and Planned Corrective Actions ? The Academy agrees with the finding. The Academy has reviewed and updated its written policies and procedures relating to cash management, allowable costs, standards for financial management, and procurement for its federal programs to ensure compliance with the Uniform Guidance effective for the following fiscal year. The Academy has separately issued a Corrective Action Plan related to this finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE ? ALL FEDERAL PROGRAMS AWARDED UNDER THE UNIFORM GUIDANCE 2022-001 Internal Controls Over Compliance With Cash Management, Allowable Costs, Standards for Financial Management, and Procurement Criteria ? 2 CFR ? 200.302(b)(5), (6), and (7) requires Universal Academy (the Academy) to have written cash management procedures, which includes procedures for determining the allowability of costs in accordance with 2 CFR 200 Subpart E ? Cost Principles, as well as a required written budget to actual comparison of expenditures for each federal award. 2 CFR 200.318(a) requires the Academy to have documented written procurement procedures, which reflect applicable state and local laws, provided they conform to applicable federal laws. 2 CFR 200.318(c) and 48 CFR 52.203-13 require documented written standards of conduct that cover conflicts of interest and govern the performance of employees engaged in the selection, award, and administration of contracts. Condition ? During our audit, we noted that the Academy?s written internal control policies over compliance with the U.S. Office of Management and Budget?s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) did not include adequate written controls over compliance with cash management, allowable costs, financial management standards, and procurement. Questioned Costs ? None. Our testing did not indicate any instances of noncompliance. Context ? The lack of written controls pertains to all federal grants. This was not a statistically valid sample. Repeat Finding ? This is a current year and prior year finding. Cause ? The Academy?s required Uniform Guidance written internal control policies for compliance over federal awards do not adequately address some required internal control policies, including cash management, allowable costs, financial management, and procurement. Effect ? This could be viewed as a violation of the award agreement. Recommendation ? We recommend that the Academy review its internal control procedures relating to cash management, allowable costs, financial management, and procurement for all federal programs. The Academy should review the new Uniform Guidance to obtain a better understanding of the requirements and identify any needed policy and procedure changes, in addition to those already referenced above. We also recommend the Academy adopt written policies pertaining to cash management, allowable costs, financial management, and procurement for all federal programs. The Academy should also document and perform regular budget to actual comparison of expenditures for each federal award. View of Responsible Official and Planned Corrective Actions ? The Academy agrees with the finding. The Academy has reviewed and updated its written policies and procedures relating to cash management, allowable costs, standards for financial management, and procurement for its federal programs to ensure compliance with the Uniform Guidance effective for the following fiscal year. The Academy has separately issued a Corrective Action Plan related to this finding.
2022-003 Department of Health and Human Services Federal Financial Assistance Listing #93.889, 22SC091990 National Bioterrorism Hospital Preparedness Program Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.318 requires documentation to be retained to detail the history of procurements. In addition, as outlined in 2 CFR 180, recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: The following matters were identified during testing: a) No independent secondary level of review or approval is performed. One employee is involved in preparing, reviewing and approving information. Additionally, internal control procedures documented within Coalition?s Grant Management Policy have not been updated since departure of the Grant Management Director. b) 15 instances identified in our sample of expenditures in which the transaction exceeded the Coalition?s micro-purchase threshold, required a price analysis, however, the price analysis was not documented or completed. c) The Coalition?s procurement policy does not include all the required elements as outlined in the Uniform Guidance. d) Five vendors were not verified against the central contractor registry prior to the expenses being incurred to ensure that the vendor was not suspended or debarred. Cause: The Coalition hasn?t formally adopted and implemented updated internal control procedures since departure of the Grant Management Director. Additionally, the Coalition did not retain documentation to support the history of procurement in accordance with Uniform Guidance. Lastly, the internal control process ensuring vendors are verified against the central contractor registry was not followed. Effect: Without established controls over procurement, suspension and debarment, there is a reasonable possibility that the Coalition would not detect errors in the normal course of performing duties and correct them in a timely manner. Without retaining supporting documentation detailing the history of procurement, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult. Lastly, failing to verify vendors against the central contractor registry may result in the Coalition contracting for services with ineligible parties. Questioned Costs: None reported. Context: Testing was performed over the compliance requirements as follows; -Procurement - A non-statistical sample of 60 non-payroll transactions were selected for testing, accounting for approximately $379,111 of $749,012 total non-payroll costs charged to the federal award. -Suspension and Debarment - all five vendors with transactions equaling or exceeding $25,000 were selected for suspension and debarment testing. Repeat Finding from Prior Year: No Recommendation: We recommend that management implement procedures and control processes to incorporate and document an independent review and approval over procurement, suspension and debarment, update the procurement policy to include Uniform Guidance elements, retain documentation on price analysis for transactions over the micro-purchase threshold and verification of vendors against the central contractor registry. Views of Responsible Officials: Management agrees with the finding.
2022-002 U.S. Department of Agriculture, Food, and Nutrition Service Emergency Food Assistance Program Assistance Listing Number: 10.568/10.569 Passed Through: The Arizona Department of Economic Security Pass Through Number: CtR052634 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding ? Significant Deficiency in Internal Control Over Compliance Condition/Context ? Internal control procedures over procurement requirements did not ensure compliance with federal awards. For 1 of 8 vendors tested, there was no documented evidence that the vendor was reviewed and approved in accordance with the Organization?s procurement policy. Criteria ? In accordance with Uniform Guidance, 2 CFR 200.318(i) requires that an entity maintain records sufficient to detail history of procurement including the rationale for the method of procurement, contractor selection, and the basis for the contract price. 2 CFR 200.303(a) requires an entity to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes. Cause ? Clerical oversight. Effect ? Noncompliance with the Compliance Supplement and Uniform Guidance. Repeat Finding ? No Questioned Costs ? None Recommendation ? The Organization complete procurement forms or another form of documentation showing that a vendor was approved and that procurement processes were appropriately performed. View of Responsible Officials - There is no disagreement with the audit findings.
2022-002 U.S. Department of Agriculture, Food, and Nutrition Service Emergency Food Assistance Program Assistance Listing Number: 10.568/10.569 Passed Through: The Arizona Department of Economic Security Pass Through Number: CtR052634 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding ? Significant Deficiency in Internal Control Over Compliance Condition/Context ? Internal control procedures over procurement requirements did not ensure compliance with federal awards. For 1 of 8 vendors tested, there was no documented evidence that the vendor was reviewed and approved in accordance with the Organization?s procurement policy. Criteria ? In accordance with Uniform Guidance, 2 CFR 200.318(i) requires that an entity maintain records sufficient to detail history of procurement including the rationale for the method of procurement, contractor selection, and the basis for the contract price. 2 CFR 200.303(a) requires an entity to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes. Cause ? Clerical oversight. Effect ? Noncompliance with the Compliance Supplement and Uniform Guidance. Repeat Finding ? No Questioned Costs ? None Recommendation ? The Organization complete procurement forms or another form of documentation showing that a vendor was approved and that procurement processes were appropriately performed. View of Responsible Officials - There is no disagreement with the audit findings.
2022-002 U.S. Department of Agriculture, Food, and Nutrition Service Emergency Food Assistance Program Assistance Listing Number: 10.568/10.569 Passed Through: The Arizona Department of Economic Security Pass Through Number: CtR052634 Award Period: July 1, 2021 ? June 30, 2022 Type of Finding ? Significant Deficiency in Internal Control Over Compliance Condition/Context ? Internal control procedures over procurement requirements did not ensure compliance with federal awards. For 1 of 8 vendors tested, there was no documented evidence that the vendor was reviewed and approved in accordance with the Organization?s procurement policy. Criteria ? In accordance with Uniform Guidance, 2 CFR 200.318(i) requires that an entity maintain records sufficient to detail history of procurement including the rationale for the method of procurement, contractor selection, and the basis for the contract price. 2 CFR 200.303(a) requires an entity to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes. Cause ? Clerical oversight. Effect ? Noncompliance with the Compliance Supplement and Uniform Guidance. Repeat Finding ? No Questioned Costs ? None Recommendation ? The Organization complete procurement forms or another form of documentation showing that a vendor was approved and that procurement processes were appropriately performed. View of Responsible Officials - There is no disagreement with the audit findings.