2022 ? 005 ? Child Nutrition Cluster ? Suspension and DebarmentFederal Agency: U.S. Department of EducationFederal Program Title: Child Nutrition ClusterAssistance Listing Number: 10.553/10.555Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: FY 2021 and FY 2022Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Significant Deficiency in Internal Control over ComplianceCriteria: ?Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6).?Condition: During our testing, we noted Suspension and debarment checks were not performed on the contract sampled. Per the school?s procurement policy, it stated that a certification of suspension and debarment needed to be completed prior to entering into a contract for all contracts over the $25,000 threshold.Questioned costs: NoneContext: Using a statistically valid sample, 1 covered transaction was selected for testing. The Transaction selected did not have a suspension and debarment certification prior to entering in a contract with the vendor.Cause: Improper understanding and implementation of existing policies.Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the South Montgomery Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 005 ? Child Nutrition Cluster ? Suspension and DebarmentFederal Agency: U.S. Department of EducationFederal Program Title: Child Nutrition ClusterAssistance Listing Number: 10.553/10.555Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: FY 2021 and FY 2022Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Significant Deficiency in Internal Control over ComplianceCriteria: ?Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6).?Condition: During our testing, we noted Suspension and debarment checks were not performed on the contract sampled. Per the school?s procurement policy, it stated that a certification of suspension and debarment needed to be completed prior to entering into a contract for all contracts over the $25,000 threshold.Questioned costs: NoneContext: Using a statistically valid sample, 1 covered transaction was selected for testing. The Transaction selected did not have a suspension and debarment certification prior to entering in a contract with the vendor.Cause: Improper understanding and implementation of existing policies.Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the South Montgomery Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 005 ? Child Nutrition Cluster ? Suspension and DebarmentFederal Agency: U.S. Department of EducationFederal Program Title: Child Nutrition ClusterAssistance Listing Number: 10.553/10.555Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: FY 2021 and FY 2022Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Significant Deficiency in Internal Control over ComplianceCriteria: ?Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6).?Condition: During our testing, we noted Suspension and debarment checks were not performed on the contract sampled. Per the school?s procurement policy, it stated that a certification of suspension and debarment needed to be completed prior to entering into a contract for all contracts over the $25,000 threshold.Questioned costs: NoneContext: Using a statistically valid sample, 1 covered transaction was selected for testing. The Transaction selected did not have a suspension and debarment certification prior to entering in a contract with the vendor.Cause: Improper understanding and implementation of existing policies.Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the South Montgomery Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 005 ? Child Nutrition Cluster ? Suspension and DebarmentFederal Agency: U.S. Department of EducationFederal Program Title: Child Nutrition ClusterAssistance Listing Number: 10.553/10.555Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: FY 2021 and FY 2022Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Significant Deficiency in Internal Control over ComplianceCriteria: ?Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6).?Condition: During our testing, we noted Suspension and debarment checks were not performed on the contract sampled. Per the school?s procurement policy, it stated that a certification of suspension and debarment needed to be completed prior to entering into a contract for all contracts over the $25,000 threshold.Questioned costs: NoneContext: Using a statistically valid sample, 1 covered transaction was selected for testing. The Transaction selected did not have a suspension and debarment certification prior to entering in a contract with the vendor.Cause: Improper understanding and implementation of existing policies.Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the South Montgomery Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 005 ? Child Nutrition Cluster ? Suspension and DebarmentFederal Agency: U.S. Department of EducationFederal Program Title: Child Nutrition ClusterAssistance Listing Number: 10.553/10.555Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: FY 2021 and FY 2022Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Significant Deficiency in Internal Control over ComplianceCriteria: ?Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6).?Condition: During our testing, we noted Suspension and debarment checks were not performed on the contract sampled. Per the school?s procurement policy, it stated that a certification of suspension and debarment needed to be completed prior to entering into a contract for all contracts over the $25,000 threshold.Questioned costs: NoneContext: Using a statistically valid sample, 1 covered transaction was selected for testing. The Transaction selected did not have a suspension and debarment certification prior to entering in a contract with the vendor.Cause: Improper understanding and implementation of existing policies.Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the South Montgomery Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 005 ? Child Nutrition Cluster ? Suspension and DebarmentFederal Agency: U.S. Department of EducationFederal Program Title: Child Nutrition ClusterAssistance Listing Number: 10.553/10.555Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: FY 2021 and FY 2022Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Significant Deficiency in Internal Control over ComplianceCriteria: ?Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. (2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6).?Condition: During our testing, we noted Suspension and debarment checks were not performed on the contract sampled. Per the school?s procurement policy, it stated that a certification of suspension and debarment needed to be completed prior to entering into a contract for all contracts over the $25,000 threshold.Questioned costs: NoneContext: Using a statistically valid sample, 1 covered transaction was selected for testing. The Transaction selected did not have a suspension and debarment certification prior to entering in a contract with the vendor.Cause: Improper understanding and implementation of existing policies.Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the South Montgomery Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts.View of Responsible Officials: There is no disagreement with the audit finding.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 200.318 General Procurement Standards requires entities to have documented procurement procedures that conform to the procurement standards identified in 2 CFR 200.317 through 200.327. Condition: The City does not have formal documented procurement policies and procedures related to expenditures of federal awards. Cause: The City Council forms a committee to review and approve disbursements of federal funds. This process is the City’s general practice but does not follow written procurement policies and procedures. Effect: The City is out of compliance with general procurement standards under 2 CFR 200.318. Recommendation: The City should adopt formal documented procurement policies and procedures related to expenditures of federal awards. Response: The City Clerk and Mayor, with help from the Treasurer, will develop and implement documented procurement procedures that conform to the procurement standards relating to Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 200.317 through 200.327.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 200.318 General Procurement Standards requires entities to have documented procurement procedures that conform to the procurement standards identified in 2 CFR 200.317 through 200.327. Condition: The City does not have formal documented procurement policies and procedures related to expenditures of federal awards. Cause: The City Council forms a committee to review and approve disbursements of federal funds. This process is the City’s general practice but does not follow written procurement policies and procedures. Effect: The City is out of compliance with general procurement standards under 2 CFR 200.318. Recommendation: The City should adopt formal documented procurement policies and procedures related to expenditures of federal awards. Response: The City Clerk and Mayor, with help from the Treasurer, will develop and implement documented procurement procedures that conform to the procurement standards relating to Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 200.317 through 200.327.
Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 200.318 General Procurement Standards requires entities to have documented procurement procedures that conform to the procurement standards identified in 2 CFR 200.317 through 200.327. Condition: The City does not have formal documented procurement policies and procedures related to expenditures of federal awards. Cause: The City Council forms a committee to review and approve disbursements of federal funds. This process is the City’s general practice but does not follow written procurement policies and procedures. Effect: The City is out of compliance with general procurement standards under 2 CFR 200.318. Recommendation: The City should adopt formal documented procurement policies and procedures related to expenditures of federal awards. Response: The City Clerk and Mayor, with help from the Treasurer, will develop and implement documented procurement procedures that conform to the procurement standards relating to Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) 200.317 through 200.327.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from four (4) vendors - CJAWS, Inc., Edmentum, Inc., Savvas Learning Company, and Technology Resource Advisors, Inc. This is a repeat finding (2021-007) from the previous fiscal year for CJAWS, Inc. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $197,791, Edmentum, Inc. - $19,190, Savvas Learning Company - $14,418, Technology Resource Advisors, Inc. - $22,220 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from four (4) vendors - CJAWS, Inc., Edmentum, Inc., Savvas Learning Company, and Technology Resource Advisors, Inc. This is a repeat finding (2021-007) from the previous fiscal year for CJAWS, Inc. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $197,791, Edmentum, Inc. - $19,190, Savvas Learning Company - $14,418, Technology Resource Advisors, Inc. - $22,220 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from four (4) vendors - CJAWS, Inc., Edmentum, Inc., Savvas Learning Company, and Technology Resource Advisors, Inc. This is a repeat finding (2021-007) from the previous fiscal year for CJAWS, Inc. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $197,791, Edmentum, Inc. - $19,190, Savvas Learning Company - $14,418, Technology Resource Advisors, Inc. - $22,220 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
Finding 2022-002 – Special Education Cluster – AL No.’s 84.027 & 84.173 Department of Education Massachusetts Department of Elementary and Secondary Education Massachusetts Department of Early Education and Care Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. As governmental subrecipients of states are also required to use the same state procurement policies and procedures for federal funds as for non‐federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: During fiscal year 2022, the Town did not comply with the required procurement policies and procedures process for procurements that exceeded both State and Federal thresholds. Questioned Costs: Unkown Cause: Weaknesses in the design and operation of controls. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be in accordance with procurement, suspension, and debarment principles. No known questioned costs are reported, as it is not quantifiable. Identification as a Repeat Finding: Yes, finding number 2021-002 Recommendation: The Town should address the weaknesses in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Managements Response: The Town and Schools have Acushnet’s Federal Grant Procedures Manual (February 2023) to ensure that procurements are conducted in accordance with Federal and State requirements – in particular, the procurement standards set out at 2 CFR sections 200.318 through 200.326
Finding 2022-002 – Special Education Cluster – AL No.’s 84.027 & 84.173 Department of Education Massachusetts Department of Elementary and Secondary Education Massachusetts Department of Early Education and Care Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. As governmental subrecipients of states are also required to use the same state procurement policies and procedures for federal funds as for non‐federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: During fiscal year 2022, the Town did not comply with the required procurement policies and procedures process for procurements that exceeded both State and Federal thresholds. Questioned Costs: Unkown Cause: Weaknesses in the design and operation of controls. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be in accordance with procurement, suspension, and debarment principles. No known questioned costs are reported, as it is not quantifiable. Identification as a Repeat Finding: Yes, finding number 2021-002 Recommendation: The Town should address the weaknesses in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Managements Response: The Town and Schools have Acushnet’s Federal Grant Procedures Manual (February 2023) to ensure that procurements are conducted in accordance with Federal and State requirements – in particular, the procurement standards set out at 2 CFR sections 200.318 through 200.326
2022-003 Procurement Policies and Covered Transactions Compliance Requirement Procurement, Suspension, and Debarment Category Significant Deficiency in Internal Control and Noncompliance Federal Agency U.S. Department of the Treasury Pass-Through Entity Puerto Rico Fiscal Agency and Financial Advisory Authority ALN 21.027 Federal Program COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Criteria 2 CFR section 200.318 General procurement standards. (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. 2 CFR section 180.220 Are any procurement contracts included as covered transactions? (a) Covered transactions under this part— (1) Do not include any procurement contracts awarded directly by a Federal agency; but (2) Do include some procurement contracts awarded by non-Federal participants in nonprocurement covered transactions. (b) Specifically, a contract for goods or services is a covered transaction if any of the following applies: (1) The contract is awarded by a participant in a nonprocurement transaction that is covered under § 180.210, and the amount of the contract is expected to equal or exceed $25,000. (2) The contract requires the consent of an official of a Federal agency. In that case, the contract, regardless of the amount, always is a covered transaction, and it does not matter who awarded it. For example, it could be a subcontract awarded by a contractor at a tier below a nonprocurement transaction, as shown in the appendix to this part. (3) The contract is for Federally-required audit services. (c) A subcontract also is a covered transaction if,— (1) It is awarded by a participant in a procurement transaction under a nonprocurement transaction of a Federal agency that extends the coverage of paragraph (b)(1) of this section to additional tiers of contracts (see the diagram in the appendix to this part showing that optional lower tier coverage); and (2) The value of the subcontract is expected to equal or exceed $25,000. Condition General Procurement Standards - Written Policies The Corporation has an outdated institutional procurement manual approved in 2014 that lacks written policies to ascertain compliance with the provisions of federal statutes, regulations, or the terms and conditions of federal awards regarding procurement, suspension, and debarment requirements. Suspension and Debarment - Covered Transaction From a population of nineteen disbursements, we selected nine disbursements to ascertain compliance with 2 CFR section 180.220 by examining the procurement documents provided by the Corporation. From that sample, we identified nine instances in which the SAM.gov registration verification process was not performed. Of the nine instances, we found eight suppliers properly registered, but one supplier appears as validated as unique and existing but not registered in SAM.gov. Cause Lack of understanding of procurement compliance requirements for federal awards. Fiscal year 2023 was the first year for the Corporation to be subjected to a single audit compliance requirement for receiving and expending COVID-19 public health emergency programs. Effect Noncompliance with sections 200.318 and 180.220 of 2 CFR may lead to temporary withholding of cash payments until the deficiency is corrected, and/or withholding further federal program awards. Questioned Costs None Recommendation General Procurement Standards - Written Policies and Suspension and Debarment - Covered Transaction We recommend the Corporation update its internal procurement written policies following the provisions of current state statutes and regulations and develop separate procurement written policies following the provisions of federal laws and regulations or the terms and conditions of federal awards, which includes the Procurement Standards described in 2 CFR section 200.317 through 200.327, as applicable. By updating, developing, and implementing the required written procurement policies, the Corporation will be able to comply with the federal government compliance requirements. Views of responsible officials Refer to Corrective Action Plan section.
Federal agency: U.S. Department of Education Federal program title: Special Education Cluster Assistance Listing Number: 84.027, 84.173 Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education and Massachusetts Department of Early Education and Care Pass-Through Number(s): Various (see Schedule of Expenditures of Federal Awards) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Compliance Requirement: Procurement Criteria or Specific Requirement: 2 CFR section 200.318, part (i) requires that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition and Context: For all five contracts selected for testing, records sufficient to detail the history of procurement were not maintained. The sample was a statistically valid sample. Questioned Costs: Cannot be determined Cause: Procedures to maintain records sufficient to detail the history of all procurements related to federal funds needs to be strengthened. Effect: Noncompliance with the federal program occurred. Repeat Finding: Yes (Finding 2021-002) Recommendation: We recommend procedures to maintain records sufficient to detail the history of all procurements be strengthened. Views of Responsible Officials: Management agrees with the finding.
Federal agency: U.S. Department of Education Federal program title: Special Education Cluster Assistance Listing Number: 84.027, 84.173 Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education and Massachusetts Department of Early Education and Care Pass-Through Number(s): Various (see Schedule of Expenditures of Federal Awards) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Compliance Requirement: Procurement Criteria or Specific Requirement: 2 CFR section 200.318, part (i) requires that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition and Context: For all five contracts selected for testing, records sufficient to detail the history of procurement were not maintained. The sample was a statistically valid sample. Questioned Costs: Cannot be determined Cause: Procedures to maintain records sufficient to detail the history of all procurements related to federal funds needs to be strengthened. Effect: Noncompliance with the federal program occurred. Repeat Finding: Yes (Finding 2021-002) Recommendation: We recommend procedures to maintain records sufficient to detail the history of all procurements be strengthened. Views of Responsible Officials: Management agrees with the finding.
Federal agency: U.S. Department of Education Federal program title: Special Education Cluster Assistance Listing Number: 84.027, 84.173 Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education and Massachusetts Department of Early Education and Care Pass-Through Number(s): Various (see Schedule of Expenditures of Federal Awards) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Compliance Requirement: Procurement Criteria or Specific Requirement: 2 CFR section 200.318, part (i) requires that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition and Context: For all five contracts selected for testing, records sufficient to detail the history of procurement were not maintained. The sample was a statistically valid sample. Questioned Costs: Cannot be determined Cause: Procedures to maintain records sufficient to detail the history of all procurements related to federal funds needs to be strengthened. Effect: Noncompliance with the federal program occurred. Repeat Finding: Yes (Finding 2021-002) Recommendation: We recommend procedures to maintain records sufficient to detail the history of all procurements be strengthened. Views of Responsible Officials: Management agrees with the finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425D210012 (Year: 2021) Questioned Costs: $189,893 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $2,439,337 were expended and reported on the Dodge County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal Awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amounts of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity … (g) Be adequately documented…” Additionally, provisions included in the Uniform Guidance, Section 202.403 – Reasonable Costs state that “a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given costs, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The constraints or requirements imposed by such factors as: sound business practices; arm’s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award… (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. € Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award’s cost.” Furthermore, provisions included in the Uniform Guidance, Section 200.318 – General Procurement standards state that “the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations… for the acquisition of property or services required under a Federal award or subaward…” Moreover, to assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA), manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program’s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Lastly, LEA personnel must also provide for specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets…” Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were identified: • Testing revealed that expenditures totaling $173,893 were not appropriately approved by GaDOE through the Consolidated Application system. Further, the expenditures were not submitted for approval on an amended budget as of the end of audit fieldwork. • Testing revealed that a payment was made to the janitorial company utilized by the School District to provide “retention” bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Furthermore, the School District does not have the authority or ability to retain these individuals as they were not employees of the School District and contract provisions requiring the individuals to remain employed by the janitorial company and in the service of the School District for a stated period of time was not reflected within the associated contract. Therefore, expenditures totaling $16,000 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $189,893 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District’s and/or GaDOE’s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing these deficiencies with management, they stated that they believed that any expenditures not previously approved on the Consolidated Application were still allowable provided that budget amendments were submitted and approved by the GaDOE prior to the end of the grant period. Additionally, they stated that they were not aware that contract amendments should be initiated prior to expending funds in excess of the stated contract rates. Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are appropriately approved by the GaDOE through the Consolidated Application process and to ensure that expenditures are in line with provisions reflected in the associated contract and or/contract amendments, prior to the expending of federal program funds. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District's and GaDOE’s policies and procedures. Views of Responsible Officials: We concur with this finding.
CONDITION: During the payroll testing of 40 premium pay transactions, for all 40 transactions there was no evidence that the County determined that premium pay did not exceed the 150% limitation described in the criteria below. In addition, the County did not identify eligible and non‐eligible employees. CRITERIA: Per 31 CFR Part 35 [RIN I505‐AC77], Coronavirus State and Local Fiscal Recovery Funds (SLRFR), Final Rule and 2 CFR §200.318 (C) elected official are prohibited from using funds to pay themselves premium pay. The Final Rule states SLFRF Funds can be paid for premium pay but those payments can’t increase an employee’s total pay above 150% of their residing state or county’s average annual wage. EFFECT: Premium payments could have been paid in excess of the 150% limitation per the SLFRF Final Ruling. Elected officials, who were deemed ineligible per the SLFRF Final Rule, were paid premium pay. CAUSE: The County did not establish or apply appropriate internal controls over premium pay payments made to ensure compliance with SLFRF Final Ruling. RECOMMENDATION: We recommend that the County establish appropriate controls over federal monies in the future to ensure compliance with federal grant expenditures prior to the disbursement. MANAGEMENT’S RESPONSE: County Commission gave former County Manager direction to consult with legal counsel to determine premium pay for County staff who worked throughout the Pandemic. A meeting was held between Former County Manager, Financial Specialist, County Sheriff and VMDC Warden to discuss premium pay for all staff as well as public safety recruitment and retention. Former County Manager stated after consulting with County Legal Counsel and NMC General Counsel, all County staff including, Elected Officials were eligible to receive “premium pay” in compliance with the American Rescue Plan Act Rule. Financial Specialist and County Sheriff questioned the eligibility for Elected Officials to receive premium pay referencing N.M. Const. Art IV, section 27 “No law shall be enacted giving any extra compensation to any public officer, servant, agent or contractor after services are rendered or contract made; nor shall the compensation of any officer be increased or diminished during his term of office, except as otherwise provided in this constitution.”, and NMSA 4‐44‐4.1 related to County Elected Official Salary caps. Former County Manager responded premium pay should be issued to all staff including Elected Officials through the accounts payable department instead of payroll to avoid violating New Mexico Constitution and State Statute and premium pay is not considered a salary increase but “premium pay” outside of regular salary paid to “essential workers”. Former County Manager went on to explain that all law enforcement officers were eligible for premium pay because they were described as “essential” within the American Rescue Plan Act Rule. In a regular Commissioner Meeting held on 10/12/2021 Former County Manager presented to Commission and recommended approval of public safety recruitment and retention plan as well as a one‐time payment to current staff of $5,000 who worked from January 2020 through October 2021 and a prorated rate be awarded to any employee that worked a portion of that time. She also stated new information was received that confirms all County employees are eligible for the premium pay, currently 88 employees. She also stated that public health contractors are also eligible for premium pay and recommended payment be made to 2.5 full time positions to contracted health care services provider. Commission approved the request from the Former County Manager based on her recommendation. Former County Manager drafted, reviewed and approved a list of employees scheduled to receive payment including 5 contracted medical service provider including the CEO of the company. Former County Manager directed accounts payable clerk to issue payment through accounts payable. On November 8th 2021, Former County Manager presented to and recommended approval additional premium pay be awarded to Employees that had retired and worked part of the period of January 2020 though October 2021 and two full time Employees that were laid off. In January 2022 Elected Officials requested a meeting be held to discuss the issuing of 1099 forms to employees who received premium pay. Also present in the meeting was Commission Chairman. Elected Officials raised concern that staff was issued a 1099 and questioned if this was correct. Former County Manager informed staff the advice the County got was to issue a 1099‐NEC, under the circumstances. However, upon review of email communication former County Manager received an opinion from her personal Tax Accountant stating that the payments should have been run through payroll and recommended Former County Manager either correct the original error and would require several steps including corrected 941’s and corrected w‐2’s or issue a 1099 NEC. Former County Manager directed accounts payable clerk to issue a 1099 NEC. Commission Chairman questioned several expenditures from American Rescue Plan Act Fund, including the additional 2 full time positions and CEO of the company not approved by Commission, it was later determined that several expenditures were not allowable under the American Rescue Plan Act Fund Rule. Colfax County Staff submitted written report to Office of the State Auditor as required under NMSA 1978, Section 12‐6‐6 (criminal violations) an agency or auditor shall notify the state auditor immediately, in writing upon discovery of any violations of criminal statute in connection with financial affairs. Former County Manager announced her resignation February 28, 2022. It was later discovered through communication with County legal Counsel and NMC General Counsel that Former County Manager mislead the County Commission, Elected Officials, and County Staff and did not consult with County Legal Counsel or NMC General Counsel as previously stated and as directed by the Commission before making recommendations for approval of American Rescue Plan Act Funds. RESPONSIBLE PARTY/TIMELINE TO CORRECT: Finance Director – June 30, 2023
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agency: Department of Interior and Department of Education Passed through the Bureau of Indian Education (BIE) Title: Indian School Equalization Program (ISEP) Education Stabilization Fund (ESF) CFDA number: 15.042 and 84.425 Award number: All major program award numbers Award period: All major program periods Criteria: The Uniform Guidance 2 CFR 200.318-200.326 require verification of suspension and debarment as part of the procurement process. Condition: The School was unable to provide any evidence of verification of suspension and debarment on one of the vendors. Questioned Costs: N/A Cause: The School did not retain evidence of verification of suspension and debarment. Effect: The School was unable to provide evidence of verification of suspension and debarment. Auditor’s Recommendations: Evidence of verification of suspension and debarment to be kept. Management’s Response: Although the PILC verifies the suspension and debarment status of every vendor for potential purchases above $150,000, we had not been routinely printing documentation verifying this process. In the future, the School will be printing off evidence of a dated keyword search to demonstrate that a vendor is not listed on the www.SAM.gov suspension/debarment list for procurement purposes.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agency: Department of Interior and Department of Education Passed through the Bureau of Indian Education (BIE) Title: Indian School Equalization Program (ISEP) Education Stabilization Fund (ESF) CFDA number: 15.042 and 84.425 Award number: All major program award numbers Award period: All major program periods Criteria: The Uniform Guidance 2 CFR 200.318-200.326 require verification of suspension and debarment as part of the procurement process. Condition: The School was unable to provide any evidence of verification of suspension and debarment on one of the vendors. Questioned Costs: N/A Cause: The School did not retain evidence of verification of suspension and debarment. Effect: The School was unable to provide evidence of verification of suspension and debarment. Auditor’s Recommendations: Evidence of verification of suspension and debarment to be kept. Management’s Response: Although the PILC verifies the suspension and debarment status of every vendor for potential purchases above $150,000, we had not been routinely printing documentation verifying this process. In the future, the School will be printing off evidence of a dated keyword search to demonstrate that a vendor is not listed on the www.SAM.gov suspension/debarment list for procurement purposes.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agency: Department of Interior and Department of Education Passed through the Bureau of Indian Education (BIE) Title: Indian School Equalization Program (ISEP) Education Stabilization Fund (ESF) CFDA number: 15.042 and 84.425 Award number: All major program award numbers Award period: All major program periods Criteria: The Uniform Guidance 2 CFR 200.318-200.326 require verification of suspension and debarment as part of the procurement process. Condition: The School was unable to provide any evidence of verification of suspension and debarment on one of the vendors. Questioned Costs: N/A Cause: The School did not retain evidence of verification of suspension and debarment. Effect: The School was unable to provide evidence of verification of suspension and debarment. Auditor’s Recommendations: Evidence of verification of suspension and debarment to be kept. Management’s Response: Although the PILC verifies the suspension and debarment status of every vendor for potential purchases above $150,000, we had not been routinely printing documentation verifying this process. In the future, the School will be printing off evidence of a dated keyword search to demonstrate that a vendor is not listed on the www.SAM.gov suspension/debarment list for procurement purposes.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
2022-004 – Procurement, Suspension, and Debarment Federal Program Information Funding Agency: US Department of Education Title: Special Education Cluster AL Number: 84.027; 84.173 Criteria Non-federal entities other than states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Furthermore, Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000. Condition Upper Valley Special Education District does not have a written procurement policy in place that follows Uniform Guidance. In addition, the District is not reviewing applicable vendors for suspension and debarment. Questioned Costs None. Context During inquiry and testing we noted that UVSE did not have a procurement policy in place that follows Uniform Guidance and that they do not ensure vendors are not suspended or debarred from receiving federal funds. Effect Upper Valley Special Education District is not in compliance with Uniform Guidance procurement, suspension, and procurement requirements. Also, the District has an increased risk of entering into a covered transaction with a vendor who is suspended or debarred from receiving federal funds. Cause Management oversight. Recommendation The District’s should create and implement a procurement policy that follows federal requirements. The District should also create policies and procedures to ensure they do not enter into a covered transaction with a vendor who is suspended or debarred from receiving federal funds. Repeat Finding This is not a repeat finding. Views of Responsible Officials See corrective action plan.
2022-004 – Procurement, Suspension, and Debarment Federal Program Information Funding Agency: US Department of Education Title: Special Education Cluster AL Number: 84.027; 84.173 Criteria Non-federal entities other than states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Furthermore, Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000. Condition Upper Valley Special Education District does not have a written procurement policy in place that follows Uniform Guidance. In addition, the District is not reviewing applicable vendors for suspension and debarment. Questioned Costs None. Context During inquiry and testing we noted that UVSE did not have a procurement policy in place that follows Uniform Guidance and that they do not ensure vendors are not suspended or debarred from receiving federal funds. Effect Upper Valley Special Education District is not in compliance with Uniform Guidance procurement, suspension, and procurement requirements. Also, the District has an increased risk of entering into a covered transaction with a vendor who is suspended or debarred from receiving federal funds. Cause Management oversight. Recommendation The District’s should create and implement a procurement policy that follows federal requirements. The District should also create policies and procedures to ensure they do not enter into a covered transaction with a vendor who is suspended or debarred from receiving federal funds. Repeat Finding This is not a repeat finding. Views of Responsible Officials See corrective action plan.
Finding 2022-011 - Noncompliance Over Procurement and Suspension and Debarment – Coronavirus State and Local Fiscal Recovery Funds PASS THROUGH GRANTOR: Direct Grant FEDERAL AGENCY: U.S. Department of Treasury ASSISTANCE LISTING: 21.027 FEDERAL PROGRAM NAME: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) FEDERAL AWARD NUMBER: SLFRP3720 FEDERAL AWARD YEAR: 2022 CONTROL CATEGORY: Procurement and Suspension and Debarment QUESTIONED COSTS: $203,000 Condition: During our review of the disbursement data from Muskogee County regarding procurement and suspension and debarment as per the Uniform Guidance 2 CFR 200.317 through 200.327, we identified the following: • One (1) ambulance was purchased in the amount of $203,000 for the Muskogee County EMS. There were no bids or quotes provide by the County or found in the BOCC meeting minutes supporting expenditure documentation. • There were six (6) vendors, in which the County did not check the www.SAM.gov website to review if the vendor had been suspended or debarred for those disbursements that warranted a bid, on the 6-month bid list, or received quotes. Cause of Condition: Policies and procedures have not been designed and implemented to ensure compliance of expenditures for all federal awards. Effect of Condition: This condition resulted in noncompliance to grant requirements and could lead to a loss of federal funds to the County. Recommendation: OSAI recommends county officials and department heads gain an understanding of federal programs awarded to Muskogee County. Internal control procedures should be designed and implemented to ensure accurate procurement and suspension and debarment and to ensure compliance with federal requirements. Management Response: Chairman of the Board of County Commissioners: Muskogee County has hired an internal grant administrator to assist in keeping the county compliant with all local, state, and federal requirements. Efforts will be made going forward to ensure that all grant funds are properly expended. This includes that all expenditures are properly documented and that all vendors are federally eligible to perform services. Criteria: 2 CFR § 200.317 through 200.327 General Procurement Standards reads as follows: When procuring property and services under a Federal award, a State must follow the same policies and procedures it uses for procurements from its non-Federal funds. The State will comply with §§ 200.321, 200.322, and 200.323 and ensure that every purchase order or other contract includes any clauses required by § 200.327. All other non-Federal entities, including subrecipients of a State, must follow the procurement standards in §§ 200.318 through 200.327. 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. (b) Non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. 2 CFR 180.700 – 180.760 Suspension and 2 CFR 180.800 – 180.885 Debarment Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215.
2022-008 Procurement Policy and Procedures U.S. Department of Justice, Passed through Illinois Criminal Justice Information Authority Crime Victim Assistance – Assistance Listing Number 16.575 Criteria: Non-federal entities other than states must follow the procurement standards set out in 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: The Corporation does not maintain a formal procurement policy and procedures that meets the requirements of the Uniform Guidance, including procedures addressing allowable costs exceeding the small purchase threshold. The lack of such a formal policy increases the risk that purchases are made that do not comply with Uniform Guidance requirements. Cause: The Corporation has not implemented a formal procurement policy and procedures that meets the requirements of the Uniform Guidance. Effect: The lack of such a formal policy increases the risk that purchases are made that do not comply with Uniform Guidance requirements. Questioned costs: None Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that the Corporation implement a formal procurement policy and procedures that meets the requirements of the Uniform Guidance. View of responsible officials of the auditee: Management agrees with the finding and recommendation.
Federal Program Title(s): ALN 14.267 – Continuum of Care Program ALN 16.575 - Crime Victim Assistance Federal Agencies: Department of Housing and Urban Development (ALN 14.267) Department of Justice (ALN 16.575) Pass-Through Agencies: New Mexico Crime Victims Reparation Commission (ALN 16.575) Award Numbers and Periods: NM0056L6B012001 (7/1/2021-6/30/2022) (14.267) NM0129D6B011901 (11/1/2020-10/31/2021) (14.267) NM0129D6B012002 (11/1/2021-10/31/2022) (14.267) 2021-VA-979 (10/1/2020-9/30/2021) (16.575) 2022-VA-180 (10/1/2021-9/30/2022) (16.575) Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of suspension and debarment. VSS should have internal controls designed to ensure compliance with this provision. 2 CFR 200.318-200.321 outline requirements maintain records sufficient to detail the history of procurement, requirements for competition, methods and purchasing thresholds, as well as other requirements for contracting with organizations with using federal funds. VSS’s policies do not meet these requirements. Condition: During our testing, we noted that VSS internal controls and accounting policies were not sufficient in regard to federal requirements for procurements and for ensuring vendors and contractors used are not suspended or debarred. Questioned costs: None. VSS did not enter into any contracts with disallowed parties, and there were no issues with mircopurchases tested. VSS policies and procedures do not contain necessary controls to ensure compliance with the requirements for suspension and debarment or procurements. As such, they were not sufficient to ensure material compliance with this compliance requirement. Context: See Condition. Cause: Lack of established controls and procedures over requirements for procurements and federal principals for suspension and debarment. Effect: Possible noncompliance with federal requirements for procurements using federal monies. Possibility to enter into a covered transaction with a noneligible contractor or vendor. Repeat Finding: 2021-003 Recommendation: We recommend that VSS reviews the current financial policies and procedures in order to better serve the organization in documenting compliance with federal cost principals and requirements. Views of responsible officials: There is no disagreement with the audit finding. VSS accepts this finding and has contacted an outsourced CPA for review and update of our policies to meet federal cost principals and requirements. These are currently pending approval by the Board of Directors for implementation.
Federal Program Title(s): ALN 14.267 – Continuum of Care Program ALN 16.575 - Crime Victim Assistance Federal Agencies: Department of Housing and Urban Development (ALN 14.267) Department of Justice (ALN 16.575) Pass-Through Agencies: New Mexico Crime Victims Reparation Commission (ALN 16.575) Award Numbers and Periods: NM0056L6B012001 (7/1/2021-6/30/2022) (14.267) NM0129D6B011901 (11/1/2020-10/31/2021) (14.267) NM0129D6B012002 (11/1/2021-10/31/2022) (14.267) 2021-VA-979 (10/1/2020-9/30/2021) (16.575) 2022-VA-180 (10/1/2021-9/30/2022) (16.575) Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of suspension and debarment. VSS should have internal controls designed to ensure compliance with this provision. 2 CFR 200.318-200.321 outline requirements maintain records sufficient to detail the history of procurement, requirements for competition, methods and purchasing thresholds, as well as other requirements for contracting with organizations with using federal funds. VSS’s policies do not meet these requirements. Condition: During our testing, we noted that VSS internal controls and accounting policies were not sufficient in regard to federal requirements for procurements and for ensuring vendors and contractors used are not suspended or debarred. Questioned costs: None. VSS did not enter into any contracts with disallowed parties, and there were no issues with mircopurchases tested. VSS policies and procedures do not contain necessary controls to ensure compliance with the requirements for suspension and debarment or procurements. As such, they were not sufficient to ensure material compliance with this compliance requirement. Context: See Condition. Cause: Lack of established controls and procedures over requirements for procurements and federal principals for suspension and debarment. Effect: Possible noncompliance with federal requirements for procurements using federal monies. Possibility to enter into a covered transaction with a noneligible contractor or vendor. Repeat Finding: 2021-003 Recommendation: We recommend that VSS reviews the current financial policies and procedures in order to better serve the organization in documenting compliance with federal cost principals and requirements. Views of responsible officials: There is no disagreement with the audit finding. VSS accepts this finding and has contacted an outsourced CPA for review and update of our policies to meet federal cost principals and requirements. These are currently pending approval by the Board of Directors for implementation.
Federal Program Title(s): ALN 14.267 – Continuum of Care Program ALN 16.575 - Crime Victim Assistance Federal Agencies: Department of Housing and Urban Development (ALN 14.267) Department of Justice (ALN 16.575) Pass-Through Agencies: New Mexico Crime Victims Reparation Commission (ALN 16.575) Award Numbers and Periods: NM0056L6B012001 (7/1/2021-6/30/2022) (14.267) NM0129D6B011901 (11/1/2020-10/31/2021) (14.267) NM0129D6B012002 (11/1/2021-10/31/2022) (14.267) 2021-VA-979 (10/1/2020-9/30/2021) (16.575) 2022-VA-180 (10/1/2021-9/30/2022) (16.575) Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of suspension and debarment. VSS should have internal controls designed to ensure compliance with this provision. 2 CFR 200.318-200.321 outline requirements maintain records sufficient to detail the history of procurement, requirements for competition, methods and purchasing thresholds, as well as other requirements for contracting with organizations with using federal funds. VSS’s policies do not meet these requirements. Condition: During our testing, we noted that VSS internal controls and accounting policies were not sufficient in regard to federal requirements for procurements and for ensuring vendors and contractors used are not suspended or debarred. Questioned costs: None. VSS did not enter into any contracts with disallowed parties, and there were no issues with mircopurchases tested. VSS policies and procedures do not contain necessary controls to ensure compliance with the requirements for suspension and debarment or procurements. As such, they were not sufficient to ensure material compliance with this compliance requirement. Context: See Condition. Cause: Lack of established controls and procedures over requirements for procurements and federal principals for suspension and debarment. Effect: Possible noncompliance with federal requirements for procurements using federal monies. Possibility to enter into a covered transaction with a noneligible contractor or vendor. Repeat Finding: 2021-003 Recommendation: We recommend that VSS reviews the current financial policies and procedures in order to better serve the organization in documenting compliance with federal cost principals and requirements. Views of responsible officials: There is no disagreement with the audit finding. VSS accepts this finding and has contacted an outsourced CPA for review and update of our policies to meet federal cost principals and requirements. These are currently pending approval by the Board of Directors for implementation.
Federal Program Title(s): ALN 14.267 – Continuum of Care Program ALN 16.575 - Crime Victim Assistance Federal Agencies: Department of Housing and Urban Development (ALN 14.267) Department of Justice (ALN 16.575) Pass-Through Agencies: New Mexico Crime Victims Reparation Commission (ALN 16.575) Award Numbers and Periods: NM0056L6B012001 (7/1/2021-6/30/2022) (14.267) NM0129D6B011901 (11/1/2020-10/31/2021) (14.267) NM0129D6B012002 (11/1/2021-10/31/2022) (14.267) 2021-VA-979 (10/1/2020-9/30/2021) (16.575) 2022-VA-180 (10/1/2021-9/30/2022) (16.575) Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of suspension and debarment. VSS should have internal controls designed to ensure compliance with this provision. 2 CFR 200.318-200.321 outline requirements maintain records sufficient to detail the history of procurement, requirements for competition, methods and purchasing thresholds, as well as other requirements for contracting with organizations with using federal funds. VSS’s policies do not meet these requirements. Condition: During our testing, we noted that VSS internal controls and accounting policies were not sufficient in regard to federal requirements for procurements and for ensuring vendors and contractors used are not suspended or debarred. Questioned costs: None. VSS did not enter into any contracts with disallowed parties, and there were no issues with mircopurchases tested. VSS policies and procedures do not contain necessary controls to ensure compliance with the requirements for suspension and debarment or procurements. As such, they were not sufficient to ensure material compliance with this compliance requirement. Context: See Condition. Cause: Lack of established controls and procedures over requirements for procurements and federal principals for suspension and debarment. Effect: Possible noncompliance with federal requirements for procurements using federal monies. Possibility to enter into a covered transaction with a noneligible contractor or vendor. Repeat Finding: 2021-003 Recommendation: We recommend that VSS reviews the current financial policies and procedures in order to better serve the organization in documenting compliance with federal cost principals and requirements. Views of responsible officials: There is no disagreement with the audit finding. VSS accepts this finding and has contacted an outsourced CPA for review and update of our policies to meet federal cost principals and requirements. These are currently pending approval by the Board of Directors for implementation.
Federal Program Title(s): ALN 14.267 – Continuum of Care Program ALN 16.575 - Crime Victim Assistance Federal Agencies: Department of Housing and Urban Development (ALN 14.267) Department of Justice (ALN 16.575) Pass-Through Agencies: New Mexico Crime Victims Reparation Commission (ALN 16.575) Award Numbers and Periods: NM0056L6B012001 (7/1/2021-6/30/2022) (14.267) NM0129D6B011901 (11/1/2020-10/31/2021) (14.267) NM0129D6B012002 (11/1/2021-10/31/2022) (14.267) 2021-VA-979 (10/1/2020-9/30/2021) (16.575) 2022-VA-180 (10/1/2021-9/30/2022) (16.575) Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of suspension and debarment. VSS should have internal controls designed to ensure compliance with this provision. 2 CFR 200.318-200.321 outline requirements maintain records sufficient to detail the history of procurement, requirements for competition, methods and purchasing thresholds, as well as other requirements for contracting with organizations with using federal funds. VSS’s policies do not meet these requirements. Condition: During our testing, we noted that VSS internal controls and accounting policies were not sufficient in regard to federal requirements for procurements and for ensuring vendors and contractors used are not suspended or debarred. Questioned costs: None. VSS did not enter into any contracts with disallowed parties, and there were no issues with mircopurchases tested. VSS policies and procedures do not contain necessary controls to ensure compliance with the requirements for suspension and debarment or procurements. As such, they were not sufficient to ensure material compliance with this compliance requirement. Context: See Condition. Cause: Lack of established controls and procedures over requirements for procurements and federal principals for suspension and debarment. Effect: Possible noncompliance with federal requirements for procurements using federal monies. Possibility to enter into a covered transaction with a noneligible contractor or vendor. Repeat Finding: 2021-003 Recommendation: We recommend that VSS reviews the current financial policies and procedures in order to better serve the organization in documenting compliance with federal cost principals and requirements. Views of responsible officials: There is no disagreement with the audit finding. VSS accepts this finding and has contacted an outsourced CPA for review and update of our policies to meet federal cost principals and requirements. These are currently pending approval by the Board of Directors for implementation.
Federal Agency: U.S. Department of Agriculture; U.S. Department of the Treasury Federal Program Name: Child Nutrition Cluster; Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 10.559; 21.027 Federal Award Identification Number and Year: 214RI306N1099/214RI306N1199 - 2022 Award Period: Fiscal Year 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement The Town and Coventry Public Schools must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). UG §200.318 General procurement standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Condition The Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 4 of 4 procurement transactions tested. Cause Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding Yes Recommendation We recommend that the Town and Coventry Public Schools updates its procurement policy to include all elements identified in 2 CRF sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
Federal Agency: U.S. Department of Agriculture; U.S. Department of the Treasury Federal Program Name: Child Nutrition Cluster; Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 10.559; 21.027 Federal Award Identification Number and Year: 214RI306N1099/214RI306N1199 - 2022 Award Period: Fiscal Year 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement The Town and Coventry Public Schools must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). UG §200.318 General procurement standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Condition The Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 4 of 4 procurement transactions tested. Cause Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding Yes Recommendation We recommend that the Town and Coventry Public Schools updates its procurement policy to include all elements identified in 2 CRF sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
Condition: During the test of 100% of expenditures, two (2) expenditures totaling $570,080, for the Coronavirus State and Local Fiscal Recovery Funds, the following noncompliance with the Procurement and Suspension and Debarment compliance requirement was noted: • The County failed to properly document the expenditure for one (1) of the two (2) federal expenditures totaling $500,000. They did not execute a contract or award documents, and the invoice was not itemized. This expenditure had a questioned cost of $500,000. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with federal compliance requirements. Effect of Condition: This condition resulted in noncompliance with federal grant requirements and could result in a loss of federal funds. Recommendation: OSAI recommends the County gain an understanding of the requirements for this program and implement internal controls to ensure compliance with these requirements. Management Response: Board of County Commissioners: The Board of County Commissioners is responsible for the overall fiscal concerns of the county. See OKLA. STAT. Title 19, § 345. The Board of County Commissioners, with the cooperation and participation of all elected officials, reviews, develops and implements policies and procedures to create a strong internal control environment. The Board of County Commissioners will work with all elected officials, the third-party administrator, and federal, state and local partners to develop policies, procedures, and internal controls designed to accurately track grants, including the application process, verification, oversight, and reporting of grant requirements. These policies and procedures will be designed to identify requirements for recipients and sub-recipients of grants, ensure accurate equipment and real property management, procurement, recipient and subrecipient monitoring and reporting. Further, policies will ensure a proper understanding of all grant requirements and compliance of the same. To assist in this process, the Board of County Commissioners engaged a third-party administrator to oversee the grant process, including application, eligibility, review, requirements, contracting, recipient tracking and oversight, and documentation and reporting. The Board of County Commissioners will work with the third-party administrator to ensure proper grant administration. Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows: The non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 § 200.320 Internal Controls reads as follows: There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319.
Federal Agency: Department of the Interior Federal Programs: Assistance to Tribally Controlled Community Colleges and Universities Assistance Listing Numbers: 15.027 Federal Award Identification Number and Year: A19AP00118-09 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: In accordance with 2 CFR 200.317 through 200.326 there are procurement standards within the Uniform Guidance. These standards include elements that should be followed pre-contract. Specifically, UG §200.318 states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: The College did not have proper documentation to support one procurement transaction. Questioned Costs: None. Context: During our testing of 8 procurement transactions, it was noted the College did not retain proper documentation related to 1 procurement transaction. Cause: The College did not retain proper documentation of one procurement transaction. Effect: The College was not in compliance with procurement regulations. Repeat Finding: No. Recommendation: We recommend the College implement policies and procedures to ensure all procurement documentation is complete and retained. Views of Responsible Officials: Management agrees with the finding and has prepared a plan to correct the finding.
Federal Program Name: Research and Development Cluster Federal Agency: National Science Foundation Federal Assistance Listing Title and Number: 47.074 Award Year: June 1, 2021 ? May 31, 2022 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The University?s procurement policy does not contain adequate documentation to demonstrate compliance with federal procurement regulations. (Deficiency) Questioned Costs: None. Context: The University?s documented procurement policies do not contain all the specified requirements of 2 CFR sections 200.318 through 200.326. Effect: The risks exist that the University could follow their procurement policy and procure an item with federal funds, which would not meet the federal procurement regulations. Cause: The writing of the policy did not take into account federal procurement regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: No Recommendation: We recommend the University revise procurement policies to incorporate all required elements of federal procurement regulations.
General procurement standards outlined in 2 CFR 200.318(a) state 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 the applicable Federal law and the standards identified by the Uniform Guidance (sections 200.318 ? 200.326). The Uniform Guidance outlines requirements over the proper oversight of contractors, having written standards of conduct for employees involved in contracting, awarding contracts to responsible contractors, maintaining records documenting the history of procurements including cost price analysis, conducting all transactions in a manner which provides full and open competition, having procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded, utilizing the methods of procurement outlined in the Uniform Guidance, and ensuring every purchase order or contract includes the applicable provisions in Appendix II. Condition: The College?s policies and procedures over procurement generally conform to the requirements outlined by the Uniform Guidance with an exception bonding requirements, contracting with small and minority businesses, and items from Appendix II to Part 200. The auditors compared the College?s policies and procedures to the applicable sections of the Uniform Guidance by reviewing two vendors of a total of four vendors with expenditure for the ESF funds and obtained the associated supporting documentation for our selections. Additionally, the auditors noted that the Institution?s procedures were not followed with regard to ensuring full and open competition, obtaining bids/quotes for the items above the micro-purchase threshold, or retaining documentation for the requirement for verifying for vendor suspension or debarment prior to contracting. The College did check for suspension/disbarment following our identification of the finding and there were no issues. The sample was not a statistically valid sample. Cause: The College's policies were not compared to Uniform Guidance to ensure all elements were incorporated prior to entering into a contract with vendors for which federal funds were the source of the expenditure. Additionally, the College?s procedures were not followed appropriately with regard to vendor bids/selection or to check for suspension and debarment of the contractor to be utilized. Effect: The College is at risk of procuring goods and services that are not in compliance with the requirements outlined by the Uniform Guidance, which increases the risk of federal expenditures being used improperly or the College entering into a covered transaction with a vendor that is debarred or suspended. Questioned costs: Not applicable Context: Not applicable Recommendation: We recommend the College revise its policies and procedures to conform to the requirements of Uniform Guidance and ensure procedures and controls are followed for all vendors to verify that a vendor with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Relevant employees should be trained on these new policies and procedures.Management?s Response: Management did not appropriately follow federal procurement guidelines related to costs that were included in the institutional reimbursement portion of HEERF funding. This was an oversight and occurred as a result of the timing of when the purchases were made, or the contracts were entered into, and when the HEERF funding and applicable guidance was communicated by the Department of Education. Management did appropriately review all contracts and the related costs for reasonableness to ensure that the College was being prudent with its financial resources, whether from the federal government or not.