Finley School District No. 53 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls to ensure compliance with procurement requirements related to piggybacking. Assistance Listing Number and Title: Child Nutrition Cluster – ALN 10.553/555 – School Breakfast Program and National School Lunch Program Federal Grantor Name: Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction (OSPI) Pass-through Award/Contract Number: 237WAWA3N11 237WAWA3N8903 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster program, which includes the School Breakfast and National School Lunch programs. These programs provide free or reduced-price meals to students from low-income families. The District received $632,822 to administer the programs during the 2023-2024 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. These procedures must reflect the most restrictive of applicable federal, state or local laws, either obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Competitive bidding may be waived through a process commonly referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement before purchasing through another entity’s contract. If the District uses such an agreement, federal regulations require it to confirm the awarding entity followed all procurement laws and regulations applicable to the entity when selecting the contractor. In addition, the District must ensure it purchases the same goods or services as detailed in the awarding entity’s specifications and at the same specified price. Description of Condition The District’s internal controls were ineffective for ensuring compliance with federal procurement standards. The District piggybacked onto a purchasing cooperative’s contract for dairy products; however, because it was an adjustable price contract with monthly pricing changes, it did not have a process to ensure it purchased the same goods and at the same price as detailed in the purchasing cooperatives contract. We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition The District experienced turnover in the position responsible for reviewing and approving purchases. The District did not provide adequate training the new staff, so they did not know they needed to verify the goods and prices matched the current contract pricing schedule. Effect of Condition The District spent $59,526 of program funds for dairy products. Without effective internal controls that ensure it follows procurement or piggybacking procedures, the District cannot demonstrate it complied with applicable federal procurement requirements and received the current contract price for the food products. Recommendation We recommend the District strengthen its internal controls to ensure it complies with applicable procurement requirements for purchases of goods and services, including ensuring it received the current contract price. We also recommend the District provide adequate training to employees responsible for the procurement process. District’s Response The Finley School District has put in place internal controls to ensure compliance with procurement requirements related to piggybacking: The Food Service Director will compare invoices to the monthly price list to ensure contract pricing is used and initial invoices once reviewed. If there are discrepancies, the Food Service Director will contact the vendor for corrections. Quarterly, the Business Manager will select a sample of invoices to review for compliance. Auditor’s Remarks We appreciate the District’s commitment to resolve the issue. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations 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 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities.
Finley School District No. 53 September 1, 2023 through August 31, 2024 2024-001 The District did not have adequate internal controls to ensure compliance with procurement requirements related to piggybacking. Assistance Listing Number and Title: Child Nutrition Cluster – ALN 10.553/555 – School Breakfast Program and National School Lunch Program Federal Grantor Name: Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction (OSPI) Pass-through Award/Contract Number: 237WAWA3N11 237WAWA3N8903 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster program, which includes the School Breakfast and National School Lunch programs. These programs provide free or reduced-price meals to students from low-income families. The District received $632,822 to administer the programs during the 2023-2024 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. These procedures must reflect the most restrictive of applicable federal, state or local laws, either obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Competitive bidding may be waived through a process commonly referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement before purchasing through another entity’s contract. If the District uses such an agreement, federal regulations require it to confirm the awarding entity followed all procurement laws and regulations applicable to the entity when selecting the contractor. In addition, the District must ensure it purchases the same goods or services as detailed in the awarding entity’s specifications and at the same specified price. Description of Condition The District’s internal controls were ineffective for ensuring compliance with federal procurement standards. The District piggybacked onto a purchasing cooperative’s contract for dairy products; however, because it was an adjustable price contract with monthly pricing changes, it did not have a process to ensure it purchased the same goods and at the same price as detailed in the purchasing cooperatives contract. We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition The District experienced turnover in the position responsible for reviewing and approving purchases. The District did not provide adequate training the new staff, so they did not know they needed to verify the goods and prices matched the current contract pricing schedule. Effect of Condition The District spent $59,526 of program funds for dairy products. Without effective internal controls that ensure it follows procurement or piggybacking procedures, the District cannot demonstrate it complied with applicable federal procurement requirements and received the current contract price for the food products. Recommendation We recommend the District strengthen its internal controls to ensure it complies with applicable procurement requirements for purchases of goods and services, including ensuring it received the current contract price. We also recommend the District provide adequate training to employees responsible for the procurement process. District’s Response The Finley School District has put in place internal controls to ensure compliance with procurement requirements related to piggybacking: The Food Service Director will compare invoices to the monthly price list to ensure contract pricing is used and initial invoices once reviewed. If there are discrepancies, the Food Service Director will contact the vendor for corrections. Quarterly, the Business Manager will select a sample of invoices to review for compliance. Auditor’s Remarks We appreciate the District’s commitment to resolve the issue. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations 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 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: The Organization is required to create a written procurement, suspension and debarment policy that complies with applicable federal requirements as indicated in 2 CFR 200.318 -200.326 and to follow this policy when procuring goods and services.Condition: During the testing performed, it was determined that documentation to support quotes, estimates, or closed bids was not maintained prior to entering into contracts. Additionally, documentation was not maintained to support that the vendors were not suspended or debarred. Cause: The Organization has designed internal controls over these areas; however, the controls did not operate as designed. Effect: Purchases were made that did not adhere to the Organization’s procurement, suspension and debarment policy. Questioned costs: n/a Context: The Organization did not maintain supporting documentation that management obtained price or rate quotes for purchases above the micro-purchase threshold. In addition, the Health Center did not maintain documentation to support that the vendors were not suspended or debarred, however subsequent testing verified that none of the vendors selected for review were suspended or debarred. Repeat Finding: Yes, 2023-003 Recommendation: The Organization should review and update the procurement and suspension and debarment policies. Additionally, the Organization should provide training to staff on transactions that are covered by the procurement, suspension and debarment policies. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future procurement, suspension and debarment transactions are identified and documentation is maintained to support the evaluation.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: The Organization is required to create a written procurement, suspension and debarment policy that complies with applicable federal requirements as indicated in 2 CFR 200.318 -200.326 and to follow this policy when procuring goods and services.Condition: During the testing performed, it was determined that documentation to support quotes, estimates, or closed bids was not maintained prior to entering into contracts. Additionally, documentation was not maintained to support that the vendors were not suspended or debarred. Cause: The Organization has designed internal controls over these areas; however, the controls did not operate as designed. Effect: Purchases were made that did not adhere to the Organization’s procurement, suspension and debarment policy. Questioned costs: n/a Context: The Organization did not maintain supporting documentation that management obtained price or rate quotes for purchases above the micro-purchase threshold. In addition, the Health Center did not maintain documentation to support that the vendors were not suspended or debarred, however subsequent testing verified that none of the vendors selected for review were suspended or debarred. Repeat Finding: Yes, 2023-003 Recommendation: The Organization should review and update the procurement and suspension and debarment policies. Additionally, the Organization should provide training to staff on transactions that are covered by the procurement, suspension and debarment policies. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future procurement, suspension and debarment transactions are identified and documentation is maintained to support the evaluation.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: The Organization is required to create a written procurement, suspension and debarment policy that complies with applicable federal requirements as indicated in 2 CFR 200.318 -200.326 and to follow this policy when procuring goods and services.Condition: During the testing performed, it was determined that documentation to support quotes, estimates, or closed bids was not maintained prior to entering into contracts. Additionally, documentation was not maintained to support that the vendors were not suspended or debarred. Cause: The Organization has designed internal controls over these areas; however, the controls did not operate as designed. Effect: Purchases were made that did not adhere to the Organization’s procurement, suspension and debarment policy. Questioned costs: n/a Context: The Organization did not maintain supporting documentation that management obtained price or rate quotes for purchases above the micro-purchase threshold. In addition, the Health Center did not maintain documentation to support that the vendors were not suspended or debarred, however subsequent testing verified that none of the vendors selected for review were suspended or debarred. Repeat Finding: Yes, 2023-003 Recommendation: The Organization should review and update the procurement and suspension and debarment policies. Additionally, the Organization should provide training to staff on transactions that are covered by the procurement, suspension and debarment policies. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future procurement, suspension and debarment transactions are identified and documentation is maintained to support the evaluation.
Health Center Program Cluster AL No. 93.224 and 93.527 U.S. Department of Health and Human Services Award No. H80CS00438, H8FCS40427, H8GCS47600 Healthy Start Initiative AL No. 93.926 Us. Department of Health and Human Services Award No. H49MC00156 Criteria: The Organization is required to create a written procurement, suspension and debarment policy that complies with applicable federal requirements as indicated in 2 CFR 200.318 -200.326 and to follow this policy when procuring goods and services.Condition: During the testing performed, it was determined that documentation to support quotes, estimates, or closed bids was not maintained prior to entering into contracts. Additionally, documentation was not maintained to support that the vendors were not suspended or debarred. Cause: The Organization has designed internal controls over these areas; however, the controls did not operate as designed. Effect: Purchases were made that did not adhere to the Organization’s procurement, suspension and debarment policy. Questioned costs: n/a Context: The Organization did not maintain supporting documentation that management obtained price or rate quotes for purchases above the micro-purchase threshold. In addition, the Health Center did not maintain documentation to support that the vendors were not suspended or debarred, however subsequent testing verified that none of the vendors selected for review were suspended or debarred. Repeat Finding: Yes, 2023-003 Recommendation: The Organization should review and update the procurement and suspension and debarment policies. Additionally, the Organization should provide training to staff on transactions that are covered by the procurement, suspension and debarment policies. Views of Responsible Officials: Management agrees with this finding. Staff will be trained to ensure future procurement, suspension and debarment transactions are identified and documentation is maintained to support the evaluation.
Finding 2024-004: Reportable finding considered a significant deficiency - Noncompliance with Internal Procurement Authorization Controls Program name: Child and Adult Care Food Program Assistance Listing: 10.558 Federal awarding agency: U.S. Department of Agriculture (USDA) Pass-through Entity: Maryland State Department of Education, District of Columbia Education Office Criteria: Under 2 CFR 200.318(a), non-federal entities must establish and maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. As required under 2 CFR Subpart D (§§200.317–200.327), organizations must follow written procurement procedures that reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards in the Uniform Guidance. The Organization’s internal procurement policy includes specific thresholds for contract approvals and designates levels of review and signature authority based on the contract value. Adherence to these internal controls is essential to ensure compliance with federal procurement requirements and appropriate stewardship of federal funds. Condition: During our testing of procurement activity, we noted that a procurement contract was executed by an individual who did not have the delegated authority to approve or sign the agreement, as required by the Organization’s internal procurement policy. The contract amount exceeded the individual’s approval threshold. The policy’s required internal approval levels were not followed prior to execution. Cause: This issue appears to have resulted from a breakdown in adherence to established internal control procedures, possibly due to a lack of training or oversight. The Organization’s procurement policy was in place and compliant with 2 CFR requirements, but it was not enforced in practice. Effect: Noncompliance with internal procurement approval controls increases the risk of unauthorized or inappropriate spending, lack of transparency, and potential ineligibility of costs charged to federal programs. While the transaction itself may ultimately be allowable, failure to follow established approval protocols constitutes a significant deficiency in internal control over compliance. Repeat finding: This is not a repeat finding. Questioned costs: None identified, as the expenditure appeared otherwise allowable. However, the control deficiency presents a risk for future noncompliance. Perspective: We selected two procurement transactions from a population of four procurement transactions from this program. The issue reflects a control failure affecting procurement activity across federally funded programs and may result in future questioned costs if not corrected. Recommendation: We recommend that the Organization follow up with the relevant parties to ensure proper reporting requirements are met on a timely basis. Management’s response and corrective action plan (unaudited): See corrective action plan.
Finding 2024-004: Reportable finding considered a significant deficiency - Noncompliance with Internal Procurement Authorization Controls Program name: Child and Adult Care Food Program Assistance Listing: 10.558 Federal awarding agency: U.S. Department of Agriculture (USDA) Pass-through Entity: Maryland State Department of Education, District of Columbia Education Office Criteria: Under 2 CFR 200.318(a), non-federal entities must establish and maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. As required under 2 CFR Subpart D (§§200.317–200.327), organizations must follow written procurement procedures that reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards in the Uniform Guidance. The Organization’s internal procurement policy includes specific thresholds for contract approvals and designates levels of review and signature authority based on the contract value. Adherence to these internal controls is essential to ensure compliance with federal procurement requirements and appropriate stewardship of federal funds. Condition: During our testing of procurement activity, we noted that a procurement contract was executed by an individual who did not have the delegated authority to approve or sign the agreement, as required by the Organization’s internal procurement policy. The contract amount exceeded the individual’s approval threshold. The policy’s required internal approval levels were not followed prior to execution. Cause: This issue appears to have resulted from a breakdown in adherence to established internal control procedures, possibly due to a lack of training or oversight. The Organization’s procurement policy was in place and compliant with 2 CFR requirements, but it was not enforced in practice. Effect: Noncompliance with internal procurement approval controls increases the risk of unauthorized or inappropriate spending, lack of transparency, and potential ineligibility of costs charged to federal programs. While the transaction itself may ultimately be allowable, failure to follow established approval protocols constitutes a significant deficiency in internal control over compliance. Repeat finding: This is not a repeat finding. Questioned costs: None identified, as the expenditure appeared otherwise allowable. However, the control deficiency presents a risk for future noncompliance. Perspective: We selected two procurement transactions from a population of four procurement transactions from this program. The issue reflects a control failure affecting procurement activity across federally funded programs and may result in future questioned costs if not corrected. Recommendation: We recommend that the Organization follow up with the relevant parties to ensure proper reporting requirements are met on a timely basis. Management’s response and corrective action plan (unaudited): See corrective action plan.
Finding Reference: 2024-002 – Procurement Policies and Procedures Federal Agency: U.S Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities - ALN# 10.760 Compliance Requirement: Procurement, suspension, and debarment Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Condition: The Authority does not have any documented procurement procedures. However, during our testing of compliance with procurement guidelines, no further deviations from federal guidelines were noted. This is a repeat finding finding from the prior year. Cause and Effect: The Authority was unacquainted with general procurement standards of the Uniform Grant Guidance. Without documented procurement procedures, it is difficult for the Authority to ensure compliance with relevant compliance requirements. Questioned Cost: None Recommendation: The Authority should establish documented procedures related to federal procurement. Views of Responsible Officials: The federal project that has been in the works for multiple years, and, as a result, the Authority determined established procurement procedures would not be written and approved. The Authority did not make this decision in haste. The Authority met compliance guidelines for the procedures of items during the project. What we lack is an approved written document, which at this time is something we do not have the resources to undertake.
Finding Reference: 2024-002 – Procurement Policies and Procedures Federal Agency: U.S Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities - ALN# 10.760 Compliance Requirement: Procurement, suspension, and debarment Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Condition: The Authority does not have any documented procurement procedures. However, during our testing of compliance with procurement guidelines, no further deviations from federal guidelines were noted. This is a repeat finding finding from the prior year. Cause and Effect: The Authority was unacquainted with general procurement standards of the Uniform Grant Guidance. Without documented procurement procedures, it is difficult for the Authority to ensure compliance with relevant compliance requirements. Questioned Cost: None Recommendation: The Authority should establish documented procedures related to federal procurement. Views of Responsible Officials: The federal project that has been in the works for multiple years, and, as a result, the Authority determined established procurement procedures would not be written and approved. The Authority did not make this decision in haste. The Authority met compliance guidelines for the procedures of items during the project. What we lack is an approved written document, which at this time is something we do not have the resources to undertake.
Finding 2024-004 Type of Finding: Significant deficiency in internal controls over compliance and immaterial noncompliance. Federal Award Program: HUD Supportive Housing for Persons with Disabilities (Assistance Listing #14.181) Compliance Requirement: Procurement Criteria: Pursuant to the Uniform Guidance, for procurements of goods and services made with federal awards, River Kourt Apartments is required to have policies in place that conform with the Procurement Standards as prescribed in 2 CFR §200.318 through §200.320. River Kourt Apartments is required to follow the methods of procurement as prescribed in 2 CFR §200.320. Condition: River Kourt Apartments has written policies and procedures regarding the procurement of goods and services; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR §200.318 through §200.320. Cause: River Kourt Apartments has written policies and procedures regarding the procurement of goods and services; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR §200.318 through §200.320. Effect of Condition: This increases risk that River Kourt Apartments would not materially comply with the procurement requirement for the major program. Questioned Costs: None. Context: There were no procurements over the de minimis threshold made during the year period ended June 30, 2024; however, the written procedures did not include all required elements regarding procurement procedures pursuant to 2 CFR §200.318 through §200.320. Repeat Finding: Yes, see Finding 2023-003. Recommendation: We recommend management revise the current policies and procedures to include all required elements for procurement procedures pursuant to 2 CFR §200.318 through §200.320. Procurement methods shall follow the methods as prescribed in 2 CFR §200.320. View of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Significant Deficiencies 2024-004 Child Nutrition Cluster – Procurement Information on Federal Program: U.S. Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, School Lunch Program Supply Chain- COVID 19 Assistance Listing numbers 10.553 and 10.555) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of various vendors, we noted that the District is not following its procurement procedures for the Child Nutrition program purchases and is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performed required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Costs: None Perspective Information: As part of required procurement testing, a review of vendors charged to the school lunch fund and therefore represented purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. Repeat Finding: No Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that their procurement procedures are being followed and that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: The District will review the requirements of 2 CFR Section 200.213 and ensure that the procurement procedures are being followed and perform a review of the eligibility of potential vendors to participate in Federal assistance programs or activities prior to disbursing funds to the vendor. This was identified as part of the Administrative Review conducted in November 2023 by the NYS Education Department (Child Nutrition Program). The District has already started the process of working on corrective action.
Significant Deficiencies 2024-004 Child Nutrition Cluster – Procurement Information on Federal Program: U.S. Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, School Lunch Program Supply Chain- COVID 19 Assistance Listing numbers 10.553 and 10.555) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of various vendors, we noted that the District is not following its procurement procedures for the Child Nutrition program purchases and is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performed required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Costs: None Perspective Information: As part of required procurement testing, a review of vendors charged to the school lunch fund and therefore represented purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. Repeat Finding: No Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that their procurement procedures are being followed and that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: The District will review the requirements of 2 CFR Section 200.213 and ensure that the procurement procedures are being followed and perform a review of the eligibility of potential vendors to participate in Federal assistance programs or activities prior to disbursing funds to the vendor. This was identified as part of the Administrative Review conducted in November 2023 by the NYS Education Department (Child Nutrition Program). The District has already started the process of working on corrective action.
Significant Deficiencies 2024-004 Child Nutrition Cluster – Procurement Information on Federal Program: U.S. Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, School Lunch Program Supply Chain- COVID 19 Assistance Listing numbers 10.553 and 10.555) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of various vendors, we noted that the District is not following its procurement procedures for the Child Nutrition program purchases and is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performed required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Costs: None Perspective Information: As part of required procurement testing, a review of vendors charged to the school lunch fund and therefore represented purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. Repeat Finding: No Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that their procurement procedures are being followed and that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: The District will review the requirements of 2 CFR Section 200.213 and ensure that the procurement procedures are being followed and perform a review of the eligibility of potential vendors to participate in Federal assistance programs or activities prior to disbursing funds to the vendor. This was identified as part of the Administrative Review conducted in November 2023 by the NYS Education Department (Child Nutrition Program). The District has already started the process of working on corrective action.
Significant Deficiencies 2024-004 Child Nutrition Cluster – Procurement Information on Federal Program: U.S. Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, School Lunch Program Supply Chain- COVID 19 Assistance Listing numbers 10.553 and 10.555) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of various vendors, we noted that the District is not following its procurement procedures for the Child Nutrition program purchases and is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performed required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Costs: None Perspective Information: As part of required procurement testing, a review of vendors charged to the school lunch fund and therefore represented purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. Repeat Finding: No Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that their procurement procedures are being followed and that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: The District will review the requirements of 2 CFR Section 200.213 and ensure that the procurement procedures are being followed and perform a review of the eligibility of potential vendors to participate in Federal assistance programs or activities prior to disbursing funds to the vendor. This was identified as part of the Administrative Review conducted in November 2023 by the NYS Education Department (Child Nutrition Program). The District has already started the process of working on corrective action.
Special Education Cluster – Procurement Information on Federal Program: U.S. Department of Education Special Education Cluster (Special Education – Grants to State (IDEA, Part B) and Special Education – Preschool Grants (IDEA Preschool) Assistance Listing numbers 84.027 and 84.173) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of various vendors, we noted that the District is not following its procurement procedures for the Special Education program purchases and is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performed required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Costs: None Perspective Information: As part of required procurement testing, a review of vendors charged to the special education cluster and therefore represents purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. Repeat Finding: No Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that their procurement procedures are being followed and that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: As of November 1, 2024, the District will have implemented a process to determine the eligibility of potential vendors to participate in Federal assistance programs or activities prior to disbursing funds.
Special Education Cluster – Procurement Information on Federal Program: U.S. Department of Education Special Education Cluster (Special Education – Grants to State (IDEA, Part B) and Special Education – Preschool Grants (IDEA Preschool) Assistance Listing numbers 84.027 and 84.173) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of various vendors, we noted that the District is not following its procurement procedures for the Special Education program purchases and is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performed required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Costs: None Perspective Information: As part of required procurement testing, a review of vendors charged to the special education cluster and therefore represents purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. Repeat Finding: No Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that their procurement procedures are being followed and that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: As of November 1, 2024, the District will have implemented a process to determine the eligibility of potential vendors to participate in Federal assistance programs or activities prior to disbursing funds.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Written Procurement Policy This finding impacts the procurement and suspension and debarment compliance requirement for the major program, Assistance Listing Number 84.282, Charter Schools, funded by U.S. Department of Education, passed through the Commonwealth of Massachusetts, Department of Elementary and Secondary Education (DESE). Criteria: The School must follow the procurement standards set out at 2 CFR Sections 200.318 through 200.326. The School also must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: During our compliance testing, we reviewed the School's procurement policy against Uniform Guidance standards. The policy did not meet all of the considerations that are required through Federal, Uniform Guidance, and state regulations. The School followed their procurement policy during fiscal year 2024, but should update this policy in accordance with these regulations Context: Compliance with the Uniform Guidance. Cause: The School’s existing procurement policy was not updated to include all of the elements required by the Uniform Guidance. Effect: Non-compliance with the Uniform Guidance, potentially resulting in a decrease in Federal funding and allow for purchases that are not completed under the approved procurement standards. Questioned Costs: No questioned costs identified. Was the finding a repeat of a finding in the immediately prior year?: No Recommendation: AAFCPAs recommends that management revise their policy to comply with current standards under the Uniform Guidance. Management’s Response: The current School policy was adopted at opening based on DESE recommended Fiscal Policy and Procedures. Given the analysis of the current policy as compared to the Uniform Guidance policy, the School policy will be updated to ensure compliance going forward. This policy will be reviewed by the Finance Committee and then brought to the full Board for approval no later than January 2025.
Programs Affected 21.027 COVID-19 State and Local Fiscal Recovery Funds Criteria 2 CFR 200.318 requires that non-federal entities must maintain written standards establishing its procurement policies. Additionally, CFR 200.214 requires that non-federal entities establish internal controls to restrict transactions with parties that are debarred, suspended, or otherwise excluded from participation in federal assistance programs or activities. Condition and Context Through our compliance testing, it was noted that the Organization did not compare recipients of federal funds to the exclusion database of the Office of Inspector General for disbursements during the year ended June 30, 2024. Additionally, the Organization did not establish written policies regarding procurements and conflicts of interest. Cause and Effect The conditions identified were a result of the Organization not establishing policies and procedures to help ensure compliance with Uniform Guidance. The non statistical sample of 20 recipients of federal funds did not identify any recipients of federal funds who were excluded parties. Questioned Costs N/A Identification of Repeat Findings N/A Recommendation We recommend the Organization perform a comparison of all recipients of federal funds to the Office of Inspector General's database to ensure all are permitted to receive grant funding prior to issuance of payment. The search results should be documented. We also recommend the Organization establish a written procurement policy and conflict of interest policy. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding. See attached Planned Corrective Actions.
Programs Affected 21.027 COVID-19 State and Local Fiscal Recovery Funds Criteria 2 CFR 200.318 requires that non-federal entities must maintain written standards establishing its procurement policies. Additionally, CFR 200.214 requires that non-federal entities establish internal controls to restrict transactions with parties that are debarred, suspended, or otherwise excluded from participation in federal assistance programs or activities. Condition and Context Through our compliance testing, it was noted that the Organization did not compare recipients of federal funds to the exclusion database of the Office of Inspector General for disbursements during the year ended June 30, 2024. Additionally, the Organization did not establish written policies regarding procurements and conflicts of interest. Cause and Effect The conditions identified were a result of the Organization not establishing policies and procedures to help ensure compliance with Uniform Guidance. The non statistical sample of 20 recipients of federal funds did not identify any recipients of federal funds who were excluded parties. Questioned Costs N/A Identification of Repeat Findings N/A Recommendation We recommend the Organization perform a comparison of all recipients of federal funds to the Office of Inspector General's database to ensure all are permitted to receive grant funding prior to issuance of payment. The search results should be documented. We also recommend the Organization establish a written procurement policy and conflict of interest policy. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding. See attached Planned Corrective Actions.
2024-002: Written Procurement, Suspension and Debarment Policy Finding Prior Year Findings: Yes, 2023-003 Department Agency: Department of Treasury State Department: Wyoming State Loan & Investment Board Office of State Lands & Investments Assistance Listing Number: ALN #21.027 Compliance Area: Procurement & Suspension & Debarment (I) Type of Finding: Significant Deficiency Questioned Costs: None Criteria: The Town of Dayton should have written standards of conduct in place to verify any entity(vendor) with which the Town spends Federal expenditures or conducts business transactions be not debarred, suspended, or otherwise excluded per 2 CFR 200.318(h) and 2 CFR 180. The written standard should address conduct convering conflicts of interest governing the performance of its employees and contractors engaged in the selections, award, and administartion of contracts (Uniform Guidance Section 200.318 and 45 CFR sections 52.203-13 and 52.203-16). Condition: The Town of Dayton did not have written controsl in palce to ensure that vendors were not suspended or debarred or included in the list of vendors prior to entering into a contract wit hthe Town. The written standard of conduct covering conflicts of interest and governing the performance of its employees and contractors must be documented when engaged in the selection, award and administration of Federal grant contracts. Cause and Effect: The Town was in the process of adopting internal control policies but did not have them completed at June 30, 2024. Repeat Finding: Yes Recommendation: We recommend that the Town of Dayton develop and adopt a written Procurement, Suspension and Debarment Policy. Response: Please see the last page of this report for the Town's response to this finding.
2024-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the Trust is the procurement standards under 2 CFR sections 200.318 through 200.326. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Trust does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The Trust has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the Trust’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • Bonding requirements • Contract provisions • Subrecipient and contractor determinations • Retention requirements for records Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the Trust’s procurement policy appropriately. This would include adding any missing components to the Trust’s current procurement policy and updating definitions of types of procurement, i.e., micro-purchases, small purchases, and small acquisition threshold, to match the language used in the Uniform Guidance procurement standards.
2024-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the Trust is the procurement standards under 2 CFR sections 200.318 through 200.326. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Trust does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The Trust has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the Trust’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • Bonding requirements • Contract provisions • Subrecipient and contractor determinations • Retention requirements for records Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the Trust’s procurement policy appropriately. This would include adding any missing components to the Trust’s current procurement policy and updating definitions of types of procurement, i.e., micro-purchases, small purchases, and small acquisition threshold, to match the language used in the Uniform Guidance procurement standards.
2024-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the Trust is the procurement standards under 2 CFR sections 200.318 through 200.326. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Trust does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The Trust has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the Trust’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • Bonding requirements • Contract provisions • Subrecipient and contractor determinations • Retention requirements for records Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the Trust’s procurement policy appropriately. This would include adding any missing components to the Trust’s current procurement policy and updating definitions of types of procurement, i.e., micro-purchases, small purchases, and small acquisition threshold, to match the language used in the Uniform Guidance procurement standards.
2024-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the Trust is the procurement standards under 2 CFR sections 200.318 through 200.326. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum, incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the Trust does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The Trust has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the Trust’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • Bonding requirements • Contract provisions • Subrecipient and contractor determinations • Retention requirements for records Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the Trust’s procurement policy appropriately. This would include adding any missing components to the Trust’s current procurement policy and updating definitions of types of procurement, i.e., micro-purchases, small purchases, and small acquisition threshold, to match the language used in the Uniform Guidance procurement standards.
2024-005 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, and Special Milk Program for Children CFDA No. 10.553, 10.555, and 10.556) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and reverification of use of same vendors as previous year, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. They are however, checking the status of any new vendors. In addition, the District does not have any procedures in place to verify purchases against the bidding documents for pricing. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. The District could also be overpaying for goods as the bid documentation is not being verified against the purchases made. Questioned Costs: None Perspective Information: As part of required follow up of prior year audit findings, a review of vendors charged to the school lunch fund and therefore represent purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. As part of the current Child Nutrition testing, certain vendors were tested with their purchases being agreed back to the bidding documentation obtained. Some instances, the items were not listed on the bidding documentation or the prices paid were higher than the bid price. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. The District should also implement procedures to verify their purchases against bidding documentation to ensure that they are paying the correct, bid upon price for their purchases. Views of the Responsible Officials and Planned Corrective Actions: The District will monitor vendors to ensure they are able to accept federal monies.
2024-005 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, and Special Milk Program for Children CFDA No. 10.553, 10.555, and 10.556) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and reverification of use of same vendors as previous year, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. They are however, checking the status of any new vendors. In addition, the District does not have any procedures in place to verify purchases against the bidding documents for pricing. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. The District could also be overpaying for goods as the bid documentation is not being verified against the purchases made. Questioned Costs: None Perspective Information: As part of required follow up of prior year audit findings, a review of vendors charged to the school lunch fund and therefore represent purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. As part of the current Child Nutrition testing, certain vendors were tested with their purchases being agreed back to the bidding documentation obtained. Some instances, the items were not listed on the bidding documentation or the prices paid were higher than the bid price. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. The District should also implement procedures to verify their purchases against bidding documentation to ensure that they are paying the correct, bid upon price for their purchases. Views of the Responsible Officials and Planned Corrective Actions: The District will monitor vendors to ensure they are able to accept federal monies.
2024-005 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, and Special Milk Program for Children CFDA No. 10.553, 10.555, and 10.556) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and reverification of use of same vendors as previous year, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. They are however, checking the status of any new vendors. In addition, the District does not have any procedures in place to verify purchases against the bidding documents for pricing. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. The District could also be overpaying for goods as the bid documentation is not being verified against the purchases made. Questioned Costs: None Perspective Information: As part of required follow up of prior year audit findings, a review of vendors charged to the school lunch fund and therefore represent purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. As part of the current Child Nutrition testing, certain vendors were tested with their purchases being agreed back to the bidding documentation obtained. Some instances, the items were not listed on the bidding documentation or the prices paid were higher than the bid price. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. The District should also implement procedures to verify their purchases against bidding documentation to ensure that they are paying the correct, bid upon price for their purchases. Views of the Responsible Officials and Planned Corrective Actions: The District will monitor vendors to ensure they are able to accept federal monies.
2024-005 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Breakfast Program, School Lunch Program, and Special Milk Program for Children CFDA No. 10.553, 10.555, and 10.556) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and reverification of use of same vendors as previous year, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs on an annual basis. They are however, checking the status of any new vendors. In addition, the District does not have any procedures in place to verify purchases against the bidding documents for pricing. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. The District could also be overpaying for goods as the bid documentation is not being verified against the purchases made. Questioned Costs: None Perspective Information: As part of required follow up of prior year audit findings, a review of vendors charged to the school lunch fund and therefore represent purchases with federal dollars was performed. Of the District’s vendors charged to the fund, none were suspended or debarred from participation in Federal assistance programs or activities. As part of the current Child Nutrition testing, certain vendors were tested with their purchases being agreed back to the bidding documentation obtained. Some instances, the items were not listed on the bidding documentation or the prices paid were higher than the bid price. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. The District should also implement procedures to verify their purchases against bidding documentation to ensure that they are paying the correct, bid upon price for their purchases. Views of the Responsible Officials and Planned Corrective Actions: The District will monitor vendors to ensure they are able to accept federal monies.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – FEDERAL ALN 10.553 AND 10.559 2024-001 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires Independent School District No. 719, Prior Lake-Savage Area Schools (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the child nutrition cluster federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place within its child nutrition cluster federal programs to ensure compliance with federal requirements relating to assuring that the District was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – Not applicable. Context – The District’s internal controls required the District to review for compliance with suspension and debarment requirements on an annual basis. The District should also be reviewing for compliance with suspension and debarment requirements any time the District adds a new vendor. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel. Effect – Noncompliance with suspension and debarment requirements could result in the District expending federal funds inappropriately or utilized vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures relating to suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance for this area should include documentation of compliance with Uniform Guidance requirements related to suspension and debarment. These controls should also include steps to ensure any vendor with which the District contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District will review procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – FEDERAL ALN 10.553 AND 10.559 2024-001 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires Independent School District No. 719, Prior Lake-Savage Area Schools (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the child nutrition cluster federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place within its child nutrition cluster federal programs to ensure compliance with federal requirements relating to assuring that the District was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – Not applicable. Context – The District’s internal controls required the District to review for compliance with suspension and debarment requirements on an annual basis. The District should also be reviewing for compliance with suspension and debarment requirements any time the District adds a new vendor. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel. Effect – Noncompliance with suspension and debarment requirements could result in the District expending federal funds inappropriately or utilized vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures relating to suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance for this area should include documentation of compliance with Uniform Guidance requirements related to suspension and debarment. These controls should also include steps to ensure any vendor with which the District contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District will review procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
2024-003: Procurement Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 10.760, U. S Department of Agriculture - Water and waste disposal systems for rural communities Federal Award Identification Number and Year: RD Loan 92-12 Loan Period 9/6/23 - 9/1/2063, RD Loan 10 Loan and RD Loan 13 Loan period 1/1/24 - 1/1/2064 Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.318 (a), the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In addition, per 2 CFR 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement. Condition: The Village did not utilize federal procurement requirements cited above for the engineering services for the Water and Sewer Fund project. Identification of How Likely Questioned Costs Were Computed: The questioned costs were determined from actual engineering design and construction cost billed (federal portion) during the July 6, 2018 through June 30, 2024 period as summarized from the request for disbursement of funds submitted. Known Questioned Costs: $562,676 Context: We tested the procurement of three contracts and identified one contract that did not follow federal procurement requirements. Cause/Effect: The Village's controls were not adequate to ensure it followed the federal requirement for procurement process. As a results, there was one instance of noncompliance related to procurements. Recommendation: We recommend the Village follow federal procurement as required in 2 CFR 200.319 (d) for all contracts reimbursed with federal funds. View of responsible officials and planned corrective action plan: See attached corrective action plan.
2024-002 WRITTEN POLICIES REQUIRED BY UNIFORM GRANT GUIDANCE Programs: Assistance to Firefighters Grants; U.S. Department of Homeland Security; ALN 97.044 Airport Improvement Program; U.S. Department of Transportation; ALN 20.106; All Award Numbers Condition: The City has not adopted federal policies as required by the Uniform Guidance (2 CFR Part 200). Key policies, including, but not limited to, procurement, subrecipient monitoring, and financial management, have not been implemented in accordance with federal standards. Criteria: Uniform Guidance mandates that entities expending federal awards comply with federal policies and procedures to ensure proper management and accountability of federal funds. Specifically, 2 CFR 200.302(b) and 200.318 require entities to implement adequate financial and procurement management systems. Cause: The City lacks formal processes to update and align its internal policies with Uniform Guidance requirements, leading to gaps in federally compliant procedures. Effect: Noncompliance with the Uniform Guidance could result in improper use or oversight of federal funds, increasing the risk of audit findings, potential disallowed costs, and jeopardizing future federal funding. Questioned Costs: No costs were required to be questioned as a result of this finding inasmuch as our testing did not reveal any unallowable costs or excess cash draws. Recommendation: Management should establish and implement federal-compliant policies, specifically focusing on procurement, financial management, and subrecipient monitoring, to ensure full alignment with Uniform Guidance requirements. Periodic policy reviews should be conducted to ensure continued compliance. View of Responsible Officials: Management agrees with the finding and will create appropriate policies and procedures to alleviate the finding from re-occurring.
2024-002 WRITTEN POLICIES REQUIRED BY UNIFORM GRANT GUIDANCE Programs: Assistance to Firefighters Grants; U.S. Department of Homeland Security; ALN 97.044 Airport Improvement Program; U.S. Department of Transportation; ALN 20.106; All Award Numbers Condition: The City has not adopted federal policies as required by the Uniform Guidance (2 CFR Part 200). Key policies, including, but not limited to, procurement, subrecipient monitoring, and financial management, have not been implemented in accordance with federal standards. Criteria: Uniform Guidance mandates that entities expending federal awards comply with federal policies and procedures to ensure proper management and accountability of federal funds. Specifically, 2 CFR 200.302(b) and 200.318 require entities to implement adequate financial and procurement management systems. Cause: The City lacks formal processes to update and align its internal policies with Uniform Guidance requirements, leading to gaps in federally compliant procedures. Effect: Noncompliance with the Uniform Guidance could result in improper use or oversight of federal funds, increasing the risk of audit findings, potential disallowed costs, and jeopardizing future federal funding. Questioned Costs: No costs were required to be questioned as a result of this finding inasmuch as our testing did not reveal any unallowable costs or excess cash draws. Recommendation: Management should establish and implement federal-compliant policies, specifically focusing on procurement, financial management, and subrecipient monitoring, to ensure full alignment with Uniform Guidance requirements. Periodic policy reviews should be conducted to ensure continued compliance. View of Responsible Officials: Management agrees with the finding and will create appropriate policies and procedures to alleviate the finding from re-occurring.
2024-002 WRITTEN POLICIES REQUIRED BY UNIFORM GRANT GUIDANCE Programs: Assistance to Firefighters Grants; U.S. Department of Homeland Security; ALN 97.044 Airport Improvement Program; U.S. Department of Transportation; ALN 20.106; All Award Numbers Condition: The City has not adopted federal policies as required by the Uniform Guidance (2 CFR Part 200). Key policies, including, but not limited to, procurement, subrecipient monitoring, and financial management, have not been implemented in accordance with federal standards. Criteria: Uniform Guidance mandates that entities expending federal awards comply with federal policies and procedures to ensure proper management and accountability of federal funds. Specifically, 2 CFR 200.302(b) and 200.318 require entities to implement adequate financial and procurement management systems. Cause: The City lacks formal processes to update and align its internal policies with Uniform Guidance requirements, leading to gaps in federally compliant procedures. Effect: Noncompliance with the Uniform Guidance could result in improper use or oversight of federal funds, increasing the risk of audit findings, potential disallowed costs, and jeopardizing future federal funding. Questioned Costs: No costs were required to be questioned as a result of this finding inasmuch as our testing did not reveal any unallowable costs or excess cash draws. Recommendation: Management should establish and implement federal-compliant policies, specifically focusing on procurement, financial management, and subrecipient monitoring, to ensure full alignment with Uniform Guidance requirements. Periodic policy reviews should be conducted to ensure continued compliance. View of Responsible Officials: Management agrees with the finding and will create appropriate policies and procedures to alleviate the finding from re-occurring.
2024-003: Suspension and Debarment—Material Weakness U.S. Department of Agriculture Passed through Missouri Department of Elementary and Secondary Education Child Nutrition Cluster, Assistance Listing No. 10.555 (National School Lunch Program), 10.553 (School Breakfast Program), 10.582 (Fresh Fruit and Vegetable Program) Federal award year 2023-2024 Criteria: The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance retirements. Also, the Uniform Guidance (2 CFR 200.212 and 200.318(h)) stipulates that when a nonfederal entity enters into a contract or purchase with an entity (vendor or subrecipient), the nonfederal entity must verify the entity is not suspended or debarred from participation in federal programs/grants when expending $25,000 or more in a year. Condition: The District did not have controls in place to reasonably ensure any entity receiving more than $25,000 in federal grant funds was not suspended or debarred, prior to providing them with federal funds. Cause: A lack of controls to reasonably ensure this verification was performed. Effect or potential effect: The District did not have controls in place to reasonably ensure compliance with suspension and debarment requirements of the Uniform Guidance. The potential effect is submitting unallowable costs, or loss of federal funding. Questioned costs: None Context: For all sample selections tested in the major program, documentation was not maintained that could provide evidence that the District had performed the required verification. None of the samples tested were identified as suspended or debarred entities. Identification as a repeat finding, if applicable: Not applicable. Recommendation: We recommend the District develop proper controls and procedures to determine whether vendors have been suspended or debarred prior to entering into contracts or purchase orders for all transactions, and maintain documentation supporting this verification. View of responsible officials: Management agrees with this finding.