Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-056 Community College of Aurora should strengthen their internal controls over suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements by: A. Ensuring staff maintain supporting documentation of suspension and debarment checks. B. Providing training and cross-training to existing employees over suspension and debarment requirements. Response Community College of Aurora A. Agree Implementation Date: October 2022 Beginning in October 2022, the duty was moved from the Principal Investigator or instructional staff previously responsible for this step to the Director of Purchasing to ensure compliance for all grant transactions. B. Agree Implementation Date: October 2022 Training will be provided for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase, to fiscal and grant staff
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-057 Otero College should strengthen their internal controls over procurement and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures. B. Ensuring staff maintain supporting documentation for procurements. C. Providing training and cross-training to existing employees over procurement requirements. Response Otero College A. Agree Implementation Date: August 2022 Otero College has adopted the system offices Sole Source justification form that will be posted to the State procurement site, requires supervisory approval, and has put that into place as of August 2022. B. Agree Implementation Date: August 2022 Otero College will ensure they maintain supporting documentation for procurements. C. Agree Implementation Date: August 2022 Otero College has a new procurement official that has attended various trainings regarding procurement rules.
Findings 2022-056, 2022-057, and 2022-058 Higher Education Emergency Relief Fund (HEERF) Procurement Compliance The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 and appropriated federal funds to provide economic aid to the American people negatively impacted by the COVID-19 pandemic. As part of the CARES Act, funds were given to the System under the Higher Education Emergency Relief Fund (HEERF) Program. The Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (CRRSAA), was signed into law on December 27, 2020, and authorized additional funding under the HEERF program (HEERF II). Finally, the American Rescue Plan Act of 2021 (ARP), enacted on March 11, 2021, authorized a third round of funding (HEERF III) in order for higher education institutions to serve students and ensure learning continues during the COVID-19 pandemic. The HEERF Program is one of the subprograms of the federal Education Stabilization Fund [ALN 84.425]. The HEERF program contains two portions: The Student Aid portion [ALN 84.425E] and the Institutional portion, which is made up of the following: ? HEERF Institutional Aid Portion (ALN 84.425F); ? HEERF Minority Serving Institutions (ALN 84.425L); ? HEERF Strengthening Institutions Program (ALN 84.425M); ? Institutional Resilience and Expanded Postsecondary Opportunity (ALN 84.425P); ? HEERF Supplemental Assistance to Institutions of Higher Education program (ALN 84.425S). Since April 2020, the System has been awarded a total of approximately $255.6 million in HEERF funding. From inception through June 30, 2022, the System spent a total of approximately $97.8 million for the HEERF program Student Aid portion and $113.9 million for the HEERF Institutional Portion. During Fiscal Year 2022, the System spent $71.9 million for the Student Aid portion and $45.1 million for the Institutional Portion; of this amount, $28.7 million represented the System?s procurement for goods and services. The System reports that it will spend the remaining amount of funding during Fiscal Year 2023 and beyond. Each of the System?s 13 campuses separately signed an agreement titled the ?Certification and Agreement? with the U.S. Department of Education (ED) to indicate each campus? acceptance of the HEERF funding and the applicable terms and requirements. Under the requirements, each campus is required to follow the State?s procurement policies and procedures. Federal procurement regulations also require that each campus include any clauses required by federal regulations in every HEERF-related purchase order or other contract. In addition, non-federal entities, including the System and its campuses, are prohibited from contracting with or making subawards under ?covered transactions? to parties that are suspended or debarred from doing business with the federal government. ?Covered transactions? include those procurement contracts for goods and services awarded under a grant or cooperative agreement. In order to comply with federal suspension and debarment requirements, the campuses can perform a search in the federal System of Award Management (SAM) website, which tracks the entities that the federal government has determined are ineligible to receive federal funding; collect a certification from the entity; or add a clause or condition to the contract. What was the purpose of our audit work and what work was performed? The purpose of the audit work was to determine whether the System?s campuses had effective internal controls in place over, and complied with, federal procurement and suspension and debarment requirements for the HEERF grant during Fiscal Year 2022. As part of our audit work, we reviewed the campuses? internal controls over the HEERF grant procurement requirements. In addition, we tested a sample of 60 of the campuses? HEERF-related 435 procurement transactions, totaling $18.8 million, to determine if the campuses were in compliance with federal procurement requirements, and whether the campuses? contractors were suspended, debarred, or otherwise excluded from participating in the contract by the federal government, through verification on the SAM website exclusions listing. How were the results of the audit work measured? We measured the results of our audit work against the following requirements: ? Federal regulation [2 CFR 180.220] states that a contract for goods or services is a covered transaction if awarded as a grant or payment for specified use and if the amount of the contract is expected to equal or exceed $25,000. Also, federal regulation [2 CFR 180.300] requires that when a non-federal entity enters into a covered transaction with another entity, the non-federal entity must verify that the person or entity they intend to do business with is not excluded or disqualified from receiving federal funds. This can be done by: (1) checking the SAM exclusions, (2) collecting a certification from that entity, or (3) adding a clause or condition to the covered transaction with that entity. ? Federal regulation [2 CFR 200.303] states that the System and its campuses, as recipients of federal funds, must establish and maintain effective internal control over their federal awards that provides reasonable assurance that the System?s campuses are managing the federal awards in compliance with federal statutes, regulations, and the award terms and conditions. ? Federal regulation [2 CFR 200.318] states that the System must document procurement procedures. The System and its campuses utilize Colorado Revised Statute Section 24, Government -State, Procurement Code; Articles 101- 112, as their procurement policy. Relevant sections of the policy include: o R-24-103-201-01 Purchasing Thresholds - (b) Small purchases are goods and services purchases costing less than $150,000. Goods and services between $25,000 and $150,000 may be purchased using a documented quote process, described in rule R-24-103-204-01. o R-24-103-201-01 Purchasing Thresholds - (c) Invitation for bids, described in rule R-24-103-202-01, request for proposals, described in rule R-24-103-203, and invitations to negotiate, described in rule R-24-103-208-03, may be used for goods or services estimated to exceed the small purchase threshold of $150,000. o R-24-103-205 Sole Source Procurements -Contracts may be awarded by use of a sole source procurement only if the following conditions are met: (a) A sole source procurement is justified when there is only one good or service that can reasonably meet the need and there is only one vendor who can provide the good or service. A requirement for a particular proprietary item (i.e., a brand name specification) does not justify a sole source procurement if there is more than one potential bidder or offeror for that item; (b) The procurement official or his or her designee shall make a written determination that a procurement is sole source, setting forth the reasons. In cases of reasonable doubt, competition should be solicited. Any request by a using agency that a procurement be restricted to one potential contractor shall be accompanied by an explanation as to why no other contractors will be suitable or acceptable to meet the need. What problems did the audit work identify? We identified at least one issue with 34 of the 60 transactions tested (57 percent), which resulted in a total of $3,254,216 in known federal questioned costs. In total, we identified 43 errors within the 34 transactions tested. Specifically, we identified the following: ? Community College of Aurora (CCA) and Pueblo Community College (PCC) could not provide documentation to support that suspension and debarment verification procedures were performed for nine transactions we reviewed for CCA and for 21 transactions we reviewed for PCC. We confirmed through additional audit work that none of the vendors were suspended or debarred; as a result, we determined that these errors did not result in questioned costs. ? Otero College (OC) did not complete the required Sole Source justification for four transactions. These errors resulted in $1,535,455 of questioned costs. ? PCC did not perform a request for proposals for two transactions which exceeded $150,000 and did not obtain documented quotes for seven transactions which were between $25,000 and $150,000, as required. These errors resulted in questioned costs of $1,718,761. Why did these problems occur? OC and PCC did not have adequate internal controls in place to ensure they complied with HEERF procurement requirements. In addition, CCA and PCC did not have adequate internal controls in place to ensure they complied with HEERF suspension and debarment requirements. Specifically, at OC and PCC, the secondary reviewer did not require staff follow procedures in place for procurement. At PCC the secondary reviewer also did not ensure that staff searched the federal System of Award Management to verify that entities it contracted with were not suspended, debarred, or otherwise excluded from participating in a contract for federal funds. In addition, they did not provide training over grant processes related to state procurement rules, such as training on requirements for staff to maintain appropriate supporting documentation for procurement-related verifications and procurement decisions. Further, CCA and OC experienced staff turnover in key positions, and existing employees could not locate the supporting documentation. Why do these problems matter? It is important for CCA, OC, and PCC to ensure that they obtain and maintain appropriate documentation to support procurement decisions, especially when they are the basis for determining CCA, OC, and PCC?s compliance with specific HEERF program requirements. In addition, CCA and PCC?s failure to perform procedures to ensure an entity is not suspended or debarred could result in the System paying funds to an entity that is disallowed from receiving such funds, thereby exposing the State to increased business risk and potential federal disallowances. See Schedule of Findings and Questioned Costs for chart/table Recommendation 2022-058 Pueblo Community College should strengthen their internal controls over procurement, suspension and debarment and ensure they comply with the Higher Education Emergency Relief Fund (HEERF) requirements and State procurement policies by: A. Ensuring the secondary reviewer enforces compliance with the Colorado Community College System?s (System) procurement procedures and that staff perform procedures to verify contracted entities are not excluded or disqualified from receiving federal funds. B. Ensuring staff maintain supporting documentation for procurements and suspension and debarment checks. C. Providing training and cross-training to existing employees over procurement, suspension and debarment requirements. Response Pueblo Community College A. Agree Implementation Date: September 2022 Going forward, the Director of Purchasing will perform all Sam.Gov searches. The secondary reviews to ensure compliance for the System's procurement and suspension and debarment procedures will be conducted by the Vice President of Administration and Finance. B. Agree Implementation Date: September 2022 The corresponding documents supporting procurement transactions and suspension and debarment checks will be scanned and filed along with the Purchase order. C. Agree Implementation Date: September 2022 Training will be provided to fiscal and grant staff for identifying when suspension and debarment must be checked for vendors of federal programs, processes and websites to access, and methodology for documenting with the purchase documentation.
US Department of Education Education Stabilization Fund Program Name: Higher Education Emergency Relief Fund (HEERF), Institutional Aid Portion Assistance Listing #: 84.425F Finding: 2022 – 001 MATERIAL NONCOMPLIANCE / SIGNIFICANT DEFICIENCY Procurement Condition: The College does not have documented procurement procedures. Cause: The College has not previously received funds that allowed for institutional spending that would have required documented procurement procedures. Effect: The College used their guiding principles and internal purchasing review policies to guide procurement which does not meet the requirement of 2 CFR 200.318(i) to keep record of the “rationale for the method of procurement.” Questioned Costs: $231,484 . This amount was determined by totaling all the related grant expenditures that required procurement procedures. Criteria: 2 CFR section 200.318 requires that non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. These entities must use their own documented procurement procedures which must reflect applicable state and local laws and regulations as well as the procurement requirements identified in 2 CFR Part 200. Recommendation: Before being awarded additional federal monies available for procurement expenditure, the College should document procurement policies and procedures that meet all compliance requirements in 2 CFR Part 200. Views of responsible personnel and planned corrective actions: The College agrees with this finding while maintaining that the entirety of the questioned costs were for allowable expenditures under HEERF Institutional Aid compliance. Prior to expending federal funds for future procurement expenditures, the College will implement documented procurement procedures. Please refer to corrective action plan on page 13.
FINDING 2022-002 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listings Number: 84.027 Federal Award Numbers and Years (or Other Identifying Numbers): 21611-034-PN01, 22611-034-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-003. Condition and Context The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases and simplified acquisitions were followed. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained, or documentation to support limited procurement procedures were conducted and maintained. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $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. INDIANA STATE BOARD OF ACCOUNTS 22 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation did not obtain price or rate quotes for the five vendors tested that were less than the simplified acquisition threshold of $150,000 but exceeded the $10,000 micro-purchase threshold. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. The School Corporation also did not follow procurement requirements for contracted services which exceeded the simplified acquisition threshold of $150,000. The School Corporation did not correctly procure a contract for the one vendor that exceeded the simplified acquisition threshold. Additionally, the School Corporation did not adequately maintain documentation detailing the history of the procurement or the rationale to limit competition. Finally, the School Corporation did not verify that this vendor was not excluded or disqualified from 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 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (ii) Simplified acquisition thresholds. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. (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. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bids method is the preferred method for procuring construction, if the conditions. (i) In order for sealed bidding to be feasible, the following conditions should be present: (A) A complete, adequate, and realistic specification or purchase description is available; (B) Two or more responsible bidders are willing and able to compete effectively for the business; and (C) The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price. (ii) If sealed bids are used, the following requirements apply: INDIANA STATE BOARD OF ACCOUNTS 24 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (A) Bids must be solicited from an adequate number of qualified sources, providing them sufficient response time prior to the date set for opening the bids, for local, and tribal governments, the invitation for bids must be publicly advertised; (B) The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond; (C) All bids will be opened at the time and place prescribed in the invitation for bids, and for local and tribal governments, the bids must be opened publicly; (D) A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in bidding documents, factors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking 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 A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, procurement procedures for goods and services were not adhered to and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 25 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FA 2022-002 Improve Controls over Procurement Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.371C – Comprehensive Literacy Development Federal Award Number: S371C190016-19A (Years: 2017-21) Questioned Costs: $177,213.73 Description: A review of expenditures charged to the Comprehensive Literacy Development program revealed that the School District’s internal control procedures were not operating appropriately to ensure that the School District’s procurement procedures were followed. Background Information: The Comprehensive Literacy Development Program (CLD) was authorized under Sections 2222-2225 of the Elementary and Secondary Education Act of 1965 to create a comprehensive literacy program to advance literacy skills, including pre-literacy skills, reading, and writing, for children from birth to grade 12, with an emphasis on disadvantaged children, including children living in poverty, English learners, and children with disabilities. CLD funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. CLD funds totaling $810,312.28 were expended and reported on the Burke County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Furthermore, Title 2 CFR Section 180.300 states in part that the non-federal entity must “verify that the entity with whom you intend to do business is not excluded or disqualified. You can do this by: (a) Checking System for Awards Management (SAM) exclusions; or (b) Collecting a certification from the entity; or (c) Adding a clause or condition to the covered transaction with the entity.” Condition: A sample of twenty-one procurement transactions was randomly selected for testing using a non-statistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiency was noted: • The School District could not provide evidence that the procurement process provided full and open competition for seven simplified acquisition purchase expenditures reviewed. Questioned Costs: Upon testing a sample of $210,800.91 in procurement transactions, known questioned costs of $177,213.73 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $744,780.82 in procurement transactions, we project the likely questioned costs to be approximately $626,113.93. Cause: This issue was the result of a change in personnel in which the documentation was misplaced. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance and Georgia Department of Education guidance. Failure to appropriately implement procedures to address procurement compliance requirements exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds with unqualified vendors. In addition, this deficiency could lead to the return of grant funds associated with unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement methods are properly identified and followed and required procurement documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.