Finding 2022-002: Significant Deficiency: COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Funds, Procurement, Suspension and Debarment Program: COVID-19 Education Stabilization Fund (ESF) Federal Agency: U.S. Department of Education Pass-Through Entity: Not Applicable Assistance Listing Number: 84.425F Federal Award Number: P425E200445 Federal Award Year: June 30, 2022 Criteria: 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/Context: The College?s policies and procedures over procurement generally conform to the requirements outlined by the Uniform Guidance. 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 eleven vendors with expenditure for the ESF funds and obtained the associated supporting documentation for our selections. For one of the vendors, it was determined that the College did not obtain multiple quotes before engaging in the contract. 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 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: Unknown 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. Response: Vendor in question frequently supplied similar materials to MCAD due to known reliability and price competitiveness. Routine procurement procedures would not require verifying vendor for suspension or debarment. After noting this finding, a search was performed at SAM.gov and no exclusions were found for the cited vendors. Going forward, vendors used for this program will undergo verification before services or materials are contracted.
Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal Program: COVID-19 ? Education Stabilization Fund ? Higher Education Emergency Relief Fund (HEERF), ALN 84.425 (F/L) Award year: 2021-2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.318 (i) General Procurement Standards states, ?the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.? 2 CFR 200.319 (e) Competition states, ?the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period.? The University of Incarnate Word?s Procurement and Bid Policy Version 1.0, Preferred Vendors, states ?Preferred vendors have been identified by the University?s Purchasing Department as providing fair and economical pricing on the goods or services that they provide; therefore, the University has decided to frequently utilize these vendors for purchasing needs. Goods or services purchased from a preferred vendor do not have to go through the bid process. A preferred vendor listing is maintained by the Purchasing Department which is available on the Policy website. Departments can submit justification to assign a vendor as preferred; however, the Director of Purchasing has ultimate discretion over the classification. All preferred vendors are formally reviewed annually by the Purchasing Department to assess whether they continue to provide the University with pricing that is within range or better than competitors. A sample of regularly purchased items is selected and the pricing from the preferred vendor is compared to the pricing of a few competitors to determine whether the preferred vendor is providing comparable pricing. Documentation of the annual pricing review is retained to justify the vendors being included on the preferred vendor listing.? Condition: The University did not maintain records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, as required by the University?s Procurement and Bid Policy, the University did not maintain and provide documentation of the performance of an annual pricing review in order to assess whether preferred vendors continue to provide comparable pricing to other vendors. Questioned costs: $0 Context: EY selected and tested six procurements with expenditures totaling $1.1 million from a population of 23 procurements with expenditures totaling $2 million charged to the HEERF program during the year ended May 31, 2022. Of the six procurements tested: ? According to the University, two procurements were made from a preferred vendor included on a preferred vendor list; however, the history of the procurement was not documented, including the decision to use a preferred vendor for the procurement. Additionally, there was no evidence that the preferred vendor was reviewed to ensure comparable pricing. ? Three procurements were made from a single vendor using noncompetitive procurement ? sole source. A sole source justification memo was prepared; however, the memo did not address the history of the procurement and the reasons for lack of solicitation of other vendors in sufficient detail. ? According to the University, one procurement was made from a vendor using noncompetitive procurement ? public emergency; however, the history of the procurement and the emergency procurement were not documented. Effect: The University did not comply with the general procurement standards per the Uniform Guidance to maintain sufficient detail of the history of the procurement, including the rationale of the method of procurement. Additionally, if the University does not review and document the review of preferred vendors for comparable pricing on a periodic basis, noncompliance with federal competitive procurement requirements could occur. Cause: The University did not have effective internal controls and procedures in place to ensure the University maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements. Identification as a repeat finding, if applicable: Not Applicable. Recommendation: The University should retain written documentation for procurements documenting the history of the procurement prior to the procurement of goods or services, including, but 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. The University should perform and maintain documentation of pricing reviews for preferred vendors to ensure continued comparable pricing and maximum open and free competition. Views of responsible officials and planned corrective actions: Management agrees with the finding and has developed a plan to correct the finding.
Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal Program: COVID-19 ? Education Stabilization Fund ? Higher Education Emergency Relief Fund (HEERF), ALN 84.425 (F/L) Award year: 2021-2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.318 (i) General Procurement Standards states, ?the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.? 2 CFR 200.319 (e) Competition states, ?the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period.? The University of Incarnate Word?s Procurement and Bid Policy Version 1.0, Preferred Vendors, states ?Preferred vendors have been identified by the University?s Purchasing Department as providing fair and economical pricing on the goods or services that they provide; therefore, the University has decided to frequently utilize these vendors for purchasing needs. Goods or services purchased from a preferred vendor do not have to go through the bid process. A preferred vendor listing is maintained by the Purchasing Department which is available on the Policy website. Departments can submit justification to assign a vendor as preferred; however, the Director of Purchasing has ultimate discretion over the classification. All preferred vendors are formally reviewed annually by the Purchasing Department to assess whether they continue to provide the University with pricing that is within range or better than competitors. A sample of regularly purchased items is selected and the pricing from the preferred vendor is compared to the pricing of a few competitors to determine whether the preferred vendor is providing comparable pricing. Documentation of the annual pricing review is retained to justify the vendors being included on the preferred vendor listing.? Condition: The University did not maintain records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, as required by the University?s Procurement and Bid Policy, the University did not maintain and provide documentation of the performance of an annual pricing review in order to assess whether preferred vendors continue to provide comparable pricing to other vendors. Questioned costs: $0 Context: EY selected and tested six procurements with expenditures totaling $1.1 million from a population of 23 procurements with expenditures totaling $2 million charged to the HEERF program during the year ended May 31, 2022. Of the six procurements tested: ? According to the University, two procurements were made from a preferred vendor included on a preferred vendor list; however, the history of the procurement was not documented, including the decision to use a preferred vendor for the procurement. Additionally, there was no evidence that the preferred vendor was reviewed to ensure comparable pricing. ? Three procurements were made from a single vendor using noncompetitive procurement ? sole source. A sole source justification memo was prepared; however, the memo did not address the history of the procurement and the reasons for lack of solicitation of other vendors in sufficient detail. ? According to the University, one procurement was made from a vendor using noncompetitive procurement ? public emergency; however, the history of the procurement and the emergency procurement were not documented. Effect: The University did not comply with the general procurement standards per the Uniform Guidance to maintain sufficient detail of the history of the procurement, including the rationale of the method of procurement. Additionally, if the University does not review and document the review of preferred vendors for comparable pricing on a periodic basis, noncompliance with federal competitive procurement requirements could occur. Cause: The University did not have effective internal controls and procedures in place to ensure the University maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements. Identification as a repeat finding, if applicable: Not Applicable. Recommendation: The University should retain written documentation for procurements documenting the history of the procurement prior to the procurement of goods or services, including, but 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. The University should perform and maintain documentation of pricing reviews for preferred vendors to ensure continued comparable pricing and maximum open and free competition. Views of responsible officials and planned corrective actions: Management agrees with the finding and has developed 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.
Finding 2022-002: Significant Deficiency: COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Funds, Procurement, Suspension and Debarment Program: COVID-19 Education Stabilization Fund (ESF) Federal Agency: U.S. Department of Education Pass-Through Entity: Not Applicable Assistance Listing Number: 84.425F Federal Award Number: P425E200445 Federal Award Year: June 30, 2022 Criteria: 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/Context: The College?s policies and procedures over procurement generally conform to the requirements outlined by the Uniform Guidance. 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 eleven vendors with expenditure for the ESF funds and obtained the associated supporting documentation for our selections. For one of the vendors, it was determined that the College did not obtain multiple quotes before engaging in the contract. 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 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: Unknown 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. Response: Vendor in question frequently supplied similar materials to MCAD due to known reliability and price competitiveness. Routine procurement procedures would not require verifying vendor for suspension or debarment. After noting this finding, a search was performed at SAM.gov and no exclusions were found for the cited vendors. Going forward, vendors used for this program will undergo verification before services or materials are contracted.
Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal Program: COVID-19 ? Education Stabilization Fund ? Higher Education Emergency Relief Fund (HEERF), ALN 84.425 (F/L) Award year: 2021-2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.318 (i) General Procurement Standards states, ?the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.? 2 CFR 200.319 (e) Competition states, ?the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period.? The University of Incarnate Word?s Procurement and Bid Policy Version 1.0, Preferred Vendors, states ?Preferred vendors have been identified by the University?s Purchasing Department as providing fair and economical pricing on the goods or services that they provide; therefore, the University has decided to frequently utilize these vendors for purchasing needs. Goods or services purchased from a preferred vendor do not have to go through the bid process. A preferred vendor listing is maintained by the Purchasing Department which is available on the Policy website. Departments can submit justification to assign a vendor as preferred; however, the Director of Purchasing has ultimate discretion over the classification. All preferred vendors are formally reviewed annually by the Purchasing Department to assess whether they continue to provide the University with pricing that is within range or better than competitors. A sample of regularly purchased items is selected and the pricing from the preferred vendor is compared to the pricing of a few competitors to determine whether the preferred vendor is providing comparable pricing. Documentation of the annual pricing review is retained to justify the vendors being included on the preferred vendor listing.? Condition: The University did not maintain records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, as required by the University?s Procurement and Bid Policy, the University did not maintain and provide documentation of the performance of an annual pricing review in order to assess whether preferred vendors continue to provide comparable pricing to other vendors. Questioned costs: $0 Context: EY selected and tested six procurements with expenditures totaling $1.1 million from a population of 23 procurements with expenditures totaling $2 million charged to the HEERF program during the year ended May 31, 2022. Of the six procurements tested: ? According to the University, two procurements were made from a preferred vendor included on a preferred vendor list; however, the history of the procurement was not documented, including the decision to use a preferred vendor for the procurement. Additionally, there was no evidence that the preferred vendor was reviewed to ensure comparable pricing. ? Three procurements were made from a single vendor using noncompetitive procurement ? sole source. A sole source justification memo was prepared; however, the memo did not address the history of the procurement and the reasons for lack of solicitation of other vendors in sufficient detail. ? According to the University, one procurement was made from a vendor using noncompetitive procurement ? public emergency; however, the history of the procurement and the emergency procurement were not documented. Effect: The University did not comply with the general procurement standards per the Uniform Guidance to maintain sufficient detail of the history of the procurement, including the rationale of the method of procurement. Additionally, if the University does not review and document the review of preferred vendors for comparable pricing on a periodic basis, noncompliance with federal competitive procurement requirements could occur. Cause: The University did not have effective internal controls and procedures in place to ensure the University maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements. Identification as a repeat finding, if applicable: Not Applicable. Recommendation: The University should retain written documentation for procurements documenting the history of the procurement prior to the procurement of goods or services, including, but 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. The University should perform and maintain documentation of pricing reviews for preferred vendors to ensure continued comparable pricing and maximum open and free competition. Views of responsible officials and planned corrective actions: Management agrees with the finding and has developed a plan to correct the finding.
Information on the federal program: Federal awarding agency: United States Department of Education (ED) Federal Program: COVID-19 ? Education Stabilization Fund ? Higher Education Emergency Relief Fund (HEERF), ALN 84.425 (F/L) Award year: 2021-2022 Criteria or specific requirement (including statutory, regulatory or other citation): 2 CFR 200.303 requires that a non-federal entity must (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.318 (i) General Procurement Standards states, ?the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.? 2 CFR 200.319 (e) Competition states, ?the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period.? The University of Incarnate Word?s Procurement and Bid Policy Version 1.0, Preferred Vendors, states ?Preferred vendors have been identified by the University?s Purchasing Department as providing fair and economical pricing on the goods or services that they provide; therefore, the University has decided to frequently utilize these vendors for purchasing needs. Goods or services purchased from a preferred vendor do not have to go through the bid process. A preferred vendor listing is maintained by the Purchasing Department which is available on the Policy website. Departments can submit justification to assign a vendor as preferred; however, the Director of Purchasing has ultimate discretion over the classification. All preferred vendors are formally reviewed annually by the Purchasing Department to assess whether they continue to provide the University with pricing that is within range or better than competitors. A sample of regularly purchased items is selected and the pricing from the preferred vendor is compared to the pricing of a few competitors to determine whether the preferred vendor is providing comparable pricing. Documentation of the annual pricing review is retained to justify the vendors being included on the preferred vendor listing.? Condition: The University did not maintain records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, as required by the University?s Procurement and Bid Policy, the University did not maintain and provide documentation of the performance of an annual pricing review in order to assess whether preferred vendors continue to provide comparable pricing to other vendors. Questioned costs: $0 Context: EY selected and tested six procurements with expenditures totaling $1.1 million from a population of 23 procurements with expenditures totaling $2 million charged to the HEERF program during the year ended May 31, 2022. Of the six procurements tested: ? According to the University, two procurements were made from a preferred vendor included on a preferred vendor list; however, the history of the procurement was not documented, including the decision to use a preferred vendor for the procurement. Additionally, there was no evidence that the preferred vendor was reviewed to ensure comparable pricing. ? Three procurements were made from a single vendor using noncompetitive procurement ? sole source. A sole source justification memo was prepared; however, the memo did not address the history of the procurement and the reasons for lack of solicitation of other vendors in sufficient detail. ? According to the University, one procurement was made from a vendor using noncompetitive procurement ? public emergency; however, the history of the procurement and the emergency procurement were not documented. Effect: The University did not comply with the general procurement standards per the Uniform Guidance to maintain sufficient detail of the history of the procurement, including the rationale of the method of procurement. Additionally, if the University does not review and document the review of preferred vendors for comparable pricing on a periodic basis, noncompliance with federal competitive procurement requirements could occur. Cause: The University did not have effective internal controls and procedures in place to ensure the University maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements. Identification as a repeat finding, if applicable: Not Applicable. Recommendation: The University should retain written documentation for procurements documenting the history of the procurement prior to the procurement of goods or services, including, but 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. The University should perform and maintain documentation of pricing reviews for preferred vendors to ensure continued comparable pricing and maximum open and free competition. Views of responsible officials and planned corrective actions: Management agrees with the finding and has developed a plan to correct the finding.
U.S. Department of Health and Human Services 2022-002 Procurement and Suspension and Debarment Program Name of Federal Program (CFDA Number) Health Centers Cluster: Consolidated Health Centers (93.224) Grants for Newly Expanded Services under the Health Care Program (93.527) Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients ?must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price? 2 CFR section 200.318(i). The Center?s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The Center also has procedures to identify procurement transactions requiring competitive bids or proposals. Context and Condition - We selected four contracts/purchases to test for compliance with procurement standards. Records for two contracts lacked documentation sufficient to detail procurement history. Cause - The Center did not follow its documentation policy for obtaining contracts or bids. Effect - A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs - No costs were questioned. Repeat Finding - No. Statistically valid - Yes. Recommendation - We recommend the Center ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials - The Center will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
U.S. Department of Health and Human Services 2022-002 Procurement and Suspension and Debarment Program Name of Federal Program (CFDA Number) Health Centers Cluster: Consolidated Health Centers (93.224) Grants for Newly Expanded Services under the Health Care Program (93.527) Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients ?must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price? 2 CFR section 200.318(i). The Center?s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The Center also has procedures to identify procurement transactions requiring competitive bids or proposals. Context and Condition - We selected four contracts/purchases to test for compliance with procurement standards. Records for two contracts lacked documentation sufficient to detail procurement history. Cause - The Center did not follow its documentation policy for obtaining contracts or bids. Effect - A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs - No costs were questioned. Repeat Finding - No. Statistically valid - Yes. Recommendation - We recommend the Center ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials - The Center will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
U.S. Department of Health and Human Services 2022-002 Procurement and Suspension and Debarment Program Name of Federal Program (CFDA Number) Health Centers Cluster: Consolidated Health Centers (93.224) Grants for Newly Expanded Services under the Health Care Program (93.527) Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients ?must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price? 2 CFR section 200.318(i). The Center?s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The Center also has procedures to identify procurement transactions requiring competitive bids or proposals. Context and Condition - We selected four contracts/purchases to test for compliance with procurement standards. Records for two contracts lacked documentation sufficient to detail procurement history. Cause - The Center did not follow its documentation policy for obtaining contracts or bids. Effect - A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs - No costs were questioned. Repeat Finding - No. Statistically valid - Yes. Recommendation - We recommend the Center ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials - The Center will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
U.S. Department of Health and Human Services 2022-002 Procurement and Suspension and Debarment Program Name of Federal Program (CFDA Number) Health Centers Cluster: Consolidated Health Centers (93.224) Grants for Newly Expanded Services under the Health Care Program (93.527) Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients ?must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price? 2 CFR section 200.318(i). The Center?s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The Center also has procedures to identify procurement transactions requiring competitive bids or proposals. Context and Condition - We selected four contracts/purchases to test for compliance with procurement standards. Records for two contracts lacked documentation sufficient to detail procurement history. Cause - The Center did not follow its documentation policy for obtaining contracts or bids. Effect - A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs - No costs were questioned. Repeat Finding - No. Statistically valid - Yes. Recommendation - We recommend the Center ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials - The Center will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
Finding No. 2022-006 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They may use their own documented procedures, which reflect applicable state and local laws and regulations, provided that the procurements confirm to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Further, KCHC’s procurement policy requires the following: • For small purchases between $10,001 to $250,000, price or rate quotes must be obtained from an adequate number of sources (at least two) and all quotes, including phone calls, web searches, etc., must be documented and kept on file. • To be allowable under a federal award, costs must be reasonable, allocable, and adequately documented and consistent with federal cost principles. Condition: Of forty non-payroll expenditures tested, aggregating $234,183 of a total population of $770,029, the following were noted: 1. For six (or 15%), supporting procurement package was not sufficient to demonstrate price or rate quotes had been obtained from an adequate number of sources. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Condition, continued: 2. For one (or 3%), no contractual agreement between KCHC and the vendor was provided to the audit team (invoice nos. 1235 and 1351 totaling $3,000 and $1,200, respectively). 3. For one (or 3%), supporting procurement package was not sufficient to support open and fair competition for document no. 2834 totaling $1,215. 4. For 11 (or 28%), no purchase order was provided. Cause: KCHC did not enforce recordkeeping and monitoring controls over compliance with applicable procurement and suspension and debarment requirements. Effect: KCHC is in noncompliance with applicable procurement requirements and questioned costs of $126,567 result. Finding No. 2022-006, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Procurement and Suspension and Debarment Questioned Costs: $126,567 Effect, continued: Identification as a Repeat Finding: Finding No. 2021-006 Recommendation: Responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and is filed to facilitate easy retrieval substantiating procurement compliance. In addition, responsible personnel should enforce compliance with procurement regulations. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.
Finding 2022-003 ? Suspension and Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: Legacy did not document that Sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: Two (2) of two (2) vendors tested. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had be checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: No. Recommendation: We recommend that Legacy retain documentation that Sam.gov was used to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to contract. The organization can keep screenshots that Sam.gov was checked or a PDF print out of the web page. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-003 ? Suspension and Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: Legacy did not document that Sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: Two (2) of two (2) vendors tested. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had be checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: No. Recommendation: We recommend that Legacy retain documentation that Sam.gov was used to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to contract. The organization can keep screenshots that Sam.gov was checked or a PDF print out of the web page. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-003 ? Suspension and Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: Legacy did not document that Sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: Two (2) of two (2) vendors tested. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had be checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: No. Recommendation: We recommend that Legacy retain documentation that Sam.gov was used to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to contract. The organization can keep screenshots that Sam.gov was checked or a PDF print out of the web page. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2022-003 ? Suspension and Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L1CCS39368-01-00; L2CCS42352-01-00 Award Periods: July 1, 2020 ? June 30, 2021; July 1, 2021 ? June 30, 2023 respectively Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: Legacy did not document that Sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: Two (2) of two (2) vendors tested. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had be checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: No. Recommendation: We recommend that Legacy retain documentation that Sam.gov was used to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to contract. The organization can keep screenshots that Sam.gov was checked or a PDF print out of the web page. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Program Name: Highway Planning and Construction Program Federal Agency: U.S. Department of Transportation Pass-through Entity: Indiana Department of Transportation Federal Assistance Listing Title and Number: Highway Planning and Construction Program, 20.205 Award Year: 2014, 2015, 2018 Criteria or Specific Requirement: Under Uniform Guidance compliance requirements for Procurement (2 CFR 200.318(i)), contract files must be 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. In cases where competition was limited, such as scenarios where specific qualifications and competence are required, the files should provide evidence that the limitation on competition was justified. Condition: The County entered into various professional services contracts for engineering and consulting services for its highway grant programs but did not maintain appropriate documentation to support its procurement decisions. Questioned Costs: $0 Context: During our testing of procurement requirements, 3 out of 3 projects selected for testing included contracts for engineering/consulting services. For 2 of the 3 contracts, the County selected based on qualifications/competence established by the state Department of Transportation rather than a formal RFP process but did not have appropriate documentation as evidence of their basis for conclusion. The other contract tested was subject to an RFP process but did not have appropriate documentation to support how the chosen firm was selected. Our sample was not, and was not intended to be, statistically valid. Effect: Contracts were approved without appropriate documentation to comply with Uniform Guidance requirements. Cause: Adequate supporting documentation on the procurements was not obtained or maintained within project or vendor files due to oversight in administration of the program. Repeat Finding: No Recommendation: We recommend the County revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. Views of Responsible Officials and Planned Corrective Action: See corrective action plan prepared by management attached.
Federal Program Name: Highway Planning and Construction Program Federal Agency: U.S. Department of Transportation Pass-through Entity: Indiana Department of Transportation Federal Assistance Listing Title and Number: Highway Planning and Construction Program, 20.205 Award Year: 2014, 2015, 2018 Criteria or Specific Requirement: Under Uniform Guidance compliance requirements for Procurement (2 CFR 200.318(i)), contract files must be 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. In cases where competition was limited, such as scenarios where specific qualifications and competence are required, the files should provide evidence that the limitation on competition was justified. Condition: The County entered into various professional services contracts for engineering and consulting services for its highway grant programs but did not maintain appropriate documentation to support its procurement decisions. Questioned Costs: $0 Context: During our testing of procurement requirements, 3 out of 3 projects selected for testing included contracts for engineering/consulting services. For 2 of the 3 contracts, the County selected based on qualifications/competence established by the state Department of Transportation rather than a formal RFP process but did not have appropriate documentation as evidence of their basis for conclusion. The other contract tested was subject to an RFP process but did not have appropriate documentation to support how the chosen firm was selected. Our sample was not, and was not intended to be, statistically valid. Effect: Contracts were approved without appropriate documentation to comply with Uniform Guidance requirements. Cause: Adequate supporting documentation on the procurements was not obtained or maintained within project or vendor files due to oversight in administration of the program. Repeat Finding: No Recommendation: We recommend the County revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. Views of Responsible Officials and Planned Corrective Action: See corrective action plan prepared by management attached.
Federal Program Name: Highway Planning and Construction Program Federal Agency: U.S. Department of Transportation Pass-through Entity: Indiana Department of Transportation Federal Assistance Listing Title and Number: Highway Planning and Construction Program, 20.205 Award Year: 2014, 2015, 2018 Criteria or Specific Requirement: Under Uniform Guidance compliance requirements for Procurement (2 CFR 200.318(i)), contract files must be 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. In cases where competition was limited, such as scenarios where specific qualifications and competence are required, the files should provide evidence that the limitation on competition was justified. Condition: The County entered into various professional services contracts for engineering and consulting services for its highway grant programs but did not maintain appropriate documentation to support its procurement decisions. Questioned Costs: $0 Context: During our testing of procurement requirements, 3 out of 3 projects selected for testing included contracts for engineering/consulting services. For 2 of the 3 contracts, the County selected based on qualifications/competence established by the state Department of Transportation rather than a formal RFP process but did not have appropriate documentation as evidence of their basis for conclusion. The other contract tested was subject to an RFP process but did not have appropriate documentation to support how the chosen firm was selected. Our sample was not, and was not intended to be, statistically valid. Effect: Contracts were approved without appropriate documentation to comply with Uniform Guidance requirements. Cause: Adequate supporting documentation on the procurements was not obtained or maintained within project or vendor files due to oversight in administration of the program. Repeat Finding: No Recommendation: We recommend the County revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. Views of Responsible Officials and Planned Corrective Action: See corrective action plan prepared by management attached.
Federal Program Name: Highway Planning and Construction Program Federal Agency: U.S. Department of Transportation Pass-through Entity: Indiana Department of Transportation Federal Assistance Listing Title and Number: Highway Planning and Construction Program, 20.205 Award Year: 2014, 2015, 2018 Criteria or Specific Requirement: Under Uniform Guidance compliance requirements for Procurement (2 CFR 200.318(i)), contract files must be 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. In cases where competition was limited, such as scenarios where specific qualifications and competence are required, the files should provide evidence that the limitation on competition was justified. Condition: The County entered into various professional services contracts for engineering and consulting services for its highway grant programs but did not maintain appropriate documentation to support its procurement decisions. Questioned Costs: $0 Context: During our testing of procurement requirements, 3 out of 3 projects selected for testing included contracts for engineering/consulting services. For 2 of the 3 contracts, the County selected based on qualifications/competence established by the state Department of Transportation rather than a formal RFP process but did not have appropriate documentation as evidence of their basis for conclusion. The other contract tested was subject to an RFP process but did not have appropriate documentation to support how the chosen firm was selected. Our sample was not, and was not intended to be, statistically valid. Effect: Contracts were approved without appropriate documentation to comply with Uniform Guidance requirements. Cause: Adequate supporting documentation on the procurements was not obtained or maintained within project or vendor files due to oversight in administration of the program. Repeat Finding: No Recommendation: We recommend the County revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. Views of Responsible Officials and Planned Corrective Action: See corrective action plan prepared by management attached.
Federal Program Name: Highway Planning and Construction Program Federal Agency: U.S. Department of Transportation Pass-through Entity: Indiana Department of Transportation Federal Assistance Listing Title and Number: Highway Planning and Construction Program, 20.205 Award Year: 2014, 2015, 2018 Criteria or Specific Requirement: Under Uniform Guidance compliance requirements for Procurement (2 CFR 200.318(i)), contract files must be 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. In cases where competition was limited, such as scenarios where specific qualifications and competence are required, the files should provide evidence that the limitation on competition was justified. Condition: The County entered into various professional services contracts for engineering and consulting services for its highway grant programs but did not maintain appropriate documentation to support its procurement decisions. Questioned Costs: $0 Context: During our testing of procurement requirements, 3 out of 3 projects selected for testing included contracts for engineering/consulting services. For 2 of the 3 contracts, the County selected based on qualifications/competence established by the state Department of Transportation rather than a formal RFP process but did not have appropriate documentation as evidence of their basis for conclusion. The other contract tested was subject to an RFP process but did not have appropriate documentation to support how the chosen firm was selected. Our sample was not, and was not intended to be, statistically valid. Effect: Contracts were approved without appropriate documentation to comply with Uniform Guidance requirements. Cause: Adequate supporting documentation on the procurements was not obtained or maintained within project or vendor files due to oversight in administration of the program. Repeat Finding: No Recommendation: We recommend the County revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. Views of Responsible Officials and Planned Corrective Action: See corrective action plan prepared by management attached.
#2021-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2CFR 200.303) Travel (2CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with Uniform Guidance. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that Organization’s expenses are not in accordance with UGG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with Uniform Guidance. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2020-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with Uniform Guidance. View of responsible officials and planned corrective action Policies will be placed and adopted by the agency that meet the UG code. These policies will be placed in the fiscal manual. The fiscal manual will be created by using federal guidelines and by using the DDAP fiscal manual as guidance.
#2021-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2CFR 200.303) Travel (2CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with Uniform Guidance. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that Organization’s expenses are not in accordance with UGG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with Uniform Guidance. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2020-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with Uniform Guidance. View of responsible officials and planned corrective action Policies will be placed and adopted by the agency that meet the UG code. These policies will be placed in the fiscal manual. The fiscal manual will be created by using federal guidelines and by using the DDAP fiscal manual as guidance.
Criteria: A non-federal entity is required to have certain written policies and procedure in compliance with Uniform Guidance and must comply with the procurement standards as described in 2 CFR 200.318 through 2 CFR 200.327. Specifically, the non-federal entity must comply with the following: • 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. • If the non-Federal entity has a parent, affiliate, or subsidiary organization that is not a State, local government, or Indian tribe, the non-Federal entity must also maintain written standards of conduct covering organizational conflicts of interest. Organizational conflicts of interest means that because of relationships with a parent company, affiliate, or subsidiary organization, the non-Federal entity is unable or appears to be unable to be impartial in conducting a procurement action involving a related organization. Condition: AIRS does not appear to have created written purchasing or procurement policies and procedures as required by 2 CFR 200.318(a). Since AIRS is an affiliate organization of the Ethiopian Community Development Council (ECDC), it appears that the relationship between AIRS and ECDC meets the “affiliate” requirement under 2 CFR 200.318 (c) (2). It does appear that AIRS has created written standards of conduct covering organizational conflicts of interest. Cause: Management has not created or maintained certain written policies and procedures as required under 2 CFR 200.318. Effect: AIRS is not in compliance with certain written policies and procedures as required under 2 CFR 200.318. Questioned Costs: None reported Repeat Finding from Prior Year: No Recommendation: Management and board should create written procurement policies and procedures and written standards of conduct covering organizational conflicts of interest that comply with the procurement standards as required under 2 CFR 200.317 through 2 CFR 200.327. Views of Responsible Officials: Management concurs with this audit finding.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Child and Adult Care Food Program Assistance Listing Number: 10.558 Pass-Through Agency: Feeding Our Future Award Period: February 2021 – December 2021 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Adverse Opinion) Criteria or specific requirement: Nonfederal 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. Under these procurement standards, there must be written standards of conduct for employees involved in contracting, procurement transactions must be conducted in a manner providing full and open competition, and certain methods must be followed for soliciting bids or pricing. Additionally, under 2 CFR Part 180, which implements Executive Orders 12549 and 12689, nonfederal entities are prohibited from contracting with parties that are suspended or debarred and must follow certain procedures to verify that an entity is not suspended or debarred when it enters into a contract. Condition: The Organization does not have a procurement policy which complies with procurement requirements noted above. The organization did not have documentation supporting the selection of the vendors used for the program. Procurements did not provide full and open competition. There were not procedures to verify that an entity was not debarred, suspended, or otherwise excluded. Additionally, contracts did not contain required elements, such as pricing, type of meals, delivery, and schedule. The contract utilized for the largest vendor was very brief and did not follow the template contract that the State of Minnesota recommends. Questioned costs: Unknown Context: There were three vendors utilized for food purchases in the following amounts: (1) $2,276,877; (2) $325,801; and (3) $254,843. For all three vendors, no procurement or suspension and debarment procedures were performed. Cause: The Organization was not aware it was required to perform procurement or suspension and debarment procedures. Management indicated the contracting processes used were approved by its sponsor organization. Effect: It is unclear if the Organization received competitive pricing for its federal grant purchases. The auditors verified that vendors were not listed as suspended or debarred. Recommendation: We recommend the Organization familiarize itself with the procurement regulations prior to entering into any future federal grants and review state and federal guidance. Views of responsible officials: This program was initiated during the height of COVID, when guidelines on both state and federal levels were changing rapidly. Management provided auditors with documentation about vendors that had been approved by the sponsor organization. Management attended all trainings provided by the sponsor organization and followed all of the program sponsor guidelines. See the Corrective Action Plan for further details.
Finding 2021-002: Material Weakness – Lack of Documentation on Sole Source Contracts and Verification of Vendors Federal grantor: Department of Commerce Condition: The Chamber contract with a vendor on a sole-source basis and did not document justification for the use of a sole source vendor. In addition, the Chamber did not verify that the vendor was not on the list of vendors suspended or debarred from federal contracting before contracting with the vendor. Criteria: Entities are required to follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320 and noncompetitive procurements. Entities also must comply with 2 CFR Part 1326 that prohibits entities that have been debarred, suspended or voluntarily excluded from participating in Federal procurement. Cause: The Chamber’s Procurement Policy allows for a sole source vendor but requires staff to document sole source procurements prior to initial purchase. It appears staff did not follow its policy. The Policy also contains a requirement to verify or receive vendor certification that they are not debarred, suspended, ineligible or voluntarily excluded from Federal procurements, but this procedure was not followed. Effect: The Department of Commerce may impose additional conditions on the receipt of a subsequent tranche of future award funds, if any, or take other available remedies as set forth in 2 C.F.C. section 200.339. Recommendation: We recommend the Chamber review policies with staff to ensure procurement requirements are followed, and that staff are familiar with federal procurement requirements. Management’s Response: Management’s response to the finding is discussed in the Corrective Action Plan.
Criteria: The Uniform Guidance requires written policies and procedures documenting how the organization determines the allowable costs eligible for reimbursement with federal funds as well as written policies and procedures documenting how the organization complies with the federal procurement standards. Condition: BREC does not currently maintain written policies and procedures for determining allowable costs and compliance with procurement requirements in accordance with 2 CFR 200.318-326. Questioned Costs: Not applicable. Cause: Written policies and procedures over allowable costs and procurement have not been developed. Effect: Written policies and procedures over allowable costs and procurement are not available to guide staff responsible for federal expenditures. Recommendation: We recommend that BREC develop written policies and procedures for determining allowable costs and for procurement under the Uniform Guidance. Management’s Response & Corrective Plan: (Unaudited) • While BREC currently does not have any federal expenses identified as unallowable costs applicable to this finding, a written SOP will be developed for determining allowable costs and procurement requirements in accordance with the applicable CFR to guide key finance staff with responsibility for federally eligible expenditures. o Anticipated Completion Date: July 31, 2024 o Responsable Contact Person: Rhonda Williams
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Town of Twisp January 1, 2021 through December 31, 2021 2021-002 The Town did not have adequate internal controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 10.760 – Waste and Water Disposal Systems for Rural Communities Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: Yes, Finding 2020-002 Description of Condition As of the end of fiscal year 2021, the Town had spent $2,379,378 in loan and grant funds from the Water and Waste Disposal Systems for Rural Communities program. The objective of this program is to assist rural communities in obtaining safe drinking water and adequate waste disposal facilities. The Town used these funds primarily for a water line project. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations for procurements standards in 2 CFR § 200.318 require award recipients to have written standards of conduct that cover conflicts of interest and expectations for their employees who are involved in selecting, awarding, and administrating contracts and purchases. Our audit found the Town’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the Town did not establish written standards of conduct covering these required elements: • Officers, employees, and agents may not participate in selecting, awarding, or administrating a contract supported by a federal award if they have a real or apparent conflict of interest. • Officers, employees, and agents may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. • Disciplinary actions for violating these standards We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition The Town has not received a federal compliance audit recently, and staff and management did not know about the requirement to have written standards of conduct covering the selection and administration of contracts involving federal funds. Effect of Condition Without written standards of conduct, the Town is at a greater risk of noncompliance with these requirements when using federal funds to procure contractors. Although the Town did not have policies in place, we verified that no one involved with selecting and administrating the contract had a real or apparent conflict of interest with the contract. Recommendation We recommend the Town develop written standards of conduct policies that conform to Uniform Guidance. Town’s Response The Town of Twisp agrees with the findings as presented and has committed to adopting policy as recommended by the State Auditor’s office in accordance with the BARS Manual, implementing internal controls for federal expenditures and annual reporting. As this audit occurred in the 2023/24 fiscal year, it will not be possible to have these changes in place in advance of the 2023 annual reporting deadline, however staff and management will implement these best practices in lieu of adopted policy. Auditor’s Remarks We appreciate the Town’s commitment to resolving the issues noted and will follow up during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 318, General Procurement Standards, establishes requirements for written standards of conduct. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Town of Twisp January 1, 2021 through December 31, 2021 2021-002 The Town did not have adequate internal controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 10.760 – Waste and Water Disposal Systems for Rural Communities Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: Yes, Finding 2020-002 Description of Condition As of the end of fiscal year 2021, the Town had spent $2,379,378 in loan and grant funds from the Water and Waste Disposal Systems for Rural Communities program. The objective of this program is to assist rural communities in obtaining safe drinking water and adequate waste disposal facilities. The Town used these funds primarily for a water line project. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations for procurements standards in 2 CFR § 200.318 require award recipients to have written standards of conduct that cover conflicts of interest and expectations for their employees who are involved in selecting, awarding, and administrating contracts and purchases. Our audit found the Town’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the Town did not establish written standards of conduct covering these required elements: • Officers, employees, and agents may not participate in selecting, awarding, or administrating a contract supported by a federal award if they have a real or apparent conflict of interest. • Officers, employees, and agents may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. • Disciplinary actions for violating these standards We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition The Town has not received a federal compliance audit recently, and staff and management did not know about the requirement to have written standards of conduct covering the selection and administration of contracts involving federal funds. Effect of Condition Without written standards of conduct, the Town is at a greater risk of noncompliance with these requirements when using federal funds to procure contractors. Although the Town did not have policies in place, we verified that no one involved with selecting and administrating the contract had a real or apparent conflict of interest with the contract. Recommendation We recommend the Town develop written standards of conduct policies that conform to Uniform Guidance. Town’s Response The Town of Twisp agrees with the findings as presented and has committed to adopting policy as recommended by the State Auditor’s office in accordance with the BARS Manual, implementing internal controls for federal expenditures and annual reporting. As this audit occurred in the 2023/24 fiscal year, it will not be possible to have these changes in place in advance of the 2023 annual reporting deadline, however staff and management will implement these best practices in lieu of adopted policy. Auditor’s Remarks We appreciate the Town’s commitment to resolving the issues noted and will follow up during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 318, General Procurement Standards, establishes requirements for written standards of conduct. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Town of Twisp January 1, 2021 through December 31, 2021 2021-002 The Town did not have adequate internal controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 10.760 – Waste and Water Disposal Systems for Rural Communities Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: N/A Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: Yes, Finding 2020-002 Description of Condition As of the end of fiscal year 2021, the Town had spent $2,379,378 in loan and grant funds from the Water and Waste Disposal Systems for Rural Communities program. The objective of this program is to assist rural communities in obtaining safe drinking water and adequate waste disposal facilities. The Town used these funds primarily for a water line project. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations for procurements standards in 2 CFR § 200.318 require award recipients to have written standards of conduct that cover conflicts of interest and expectations for their employees who are involved in selecting, awarding, and administrating contracts and purchases. Our audit found the Town’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the Town did not establish written standards of conduct covering these required elements: • Officers, employees, and agents may not participate in selecting, awarding, or administrating a contract supported by a federal award if they have a real or apparent conflict of interest. • Officers, employees, and agents may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. • Disciplinary actions for violating these standards We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition The Town has not received a federal compliance audit recently, and staff and management did not know about the requirement to have written standards of conduct covering the selection and administration of contracts involving federal funds. Effect of Condition Without written standards of conduct, the Town is at a greater risk of noncompliance with these requirements when using federal funds to procure contractors. Although the Town did not have policies in place, we verified that no one involved with selecting and administrating the contract had a real or apparent conflict of interest with the contract. Recommendation We recommend the Town develop written standards of conduct policies that conform to Uniform Guidance. Town’s Response The Town of Twisp agrees with the findings as presented and has committed to adopting policy as recommended by the State Auditor’s office in accordance with the BARS Manual, implementing internal controls for federal expenditures and annual reporting. As this audit occurred in the 2023/24 fiscal year, it will not be possible to have these changes in place in advance of the 2023 annual reporting deadline, however staff and management will implement these best practices in lieu of adopted policy. Auditor’s Remarks We appreciate the Town’s commitment to resolving the issues noted and will follow up during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 318, General Procurement Standards, establishes requirements for written standards of conduct. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Entity: King County Award Numbers: 6200091 Award Periods: January 1, 2021 through December 31, 2024 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance), Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity 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 requirement identified in 2 CFR Part 200. The procurement procedures must include the following: - Using the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, using one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of the circumstances are met, in accordance with 2 CFR section 200.320(c)). - Using Noncompetitive procurement only if one or more of the following circumstances apply: · The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; · The item is available only from a single source; · The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; - The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or ∙ After solicitation of a number of sources, competition is determined inadequate PDA’s procurement policy also requires a verification that vendors and sub-recipient are not suspended or debarred by checking the website of the System for Award Management and documentation of such verification maintained by the Finance Office. Condition/Context While PDA has established a procurement policy, it does not fully conform to Federal law and the Uniform Guidance for the following reasons: - Micro purchase threshold is not explicitly defined, although it is mentioned that cost and price analysis shall be made and documented in connection with every procurement action above $5,000. - The policy does not clear provisions for maintaining detailed procurement records. Such records should include the rationale for the procurement method, the selection of contract type, the contractor selection or rejection process, and the basis for the contract price. - The simplified acquisition threshold is not defined and does not incorporate all relevant elements including sealed bids method. During our testing of 3 procurement transactions from a total of 20, we observed that, despite management's detailed historical background on each of the selected the necessary documentation evidencing compliance with PDA’s procurement standards was not retained. All the transactions tested were noncompetitive and thus single sourced. The total misstatement from these three transactions amounted to approximately $56,000 out of a total population of about $186,491. Furthermore, for these three vendors, which represented a 100% sample, we found no evidence of documentation for suspension and debarment verification. Although discussions with management suggested that all these transactions were properly conceived and evaluated at the time, there was no contemporaneous documentation to support this. Cause PDA’s procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Internal controls over maintaining sufficient records to detail the history of procurement including noncompetitive justification and suspension and debarment verification were found to be insufficient. Effect The policy did not fully conformed to the Uniform Guidance resulting to noncompliance issues such as records not sufficient to detail the history of procurement transactions. Questioned Costs $186,491 Repeat Finding No. Recommendation We recommend PDA implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations conforming to applicable federal statutes and requirement in 2 CFR part 200. Management should ensure procurement transactions are documented in such detail to evidence the method of procurement use and vendor verification for suspension and debarment.
Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of Treasury Program Titles: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Entity: King County Award Numbers: 6200091 Award Periods: January 1, 2021 through December 31, 2024 Criteria Internal control requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance), Subpart D ‐ Post Federal Award Requirements, Section 200.318 through 200.326 Internal Controls, require that a non‐Federal entity 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 requirement identified in 2 CFR Part 200. The procurement procedures must include the following: - Using the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). - For acquisitions exceeding the simplified acquisition threshold, using one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of the circumstances are met, in accordance with 2 CFR section 200.320(c)). - Using Noncompetitive procurement only if one or more of the following circumstances apply: · The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; · The item is available only from a single source; · The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; - The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or ∙ After solicitation of a number of sources, competition is determined inadequate PDA’s procurement policy also requires a verification that vendors and sub-recipient are not suspended or debarred by checking the website of the System for Award Management and documentation of such verification maintained by the Finance Office. Condition/Context While PDA has established a procurement policy, it does not fully conform to Federal law and the Uniform Guidance for the following reasons: - Micro purchase threshold is not explicitly defined, although it is mentioned that cost and price analysis shall be made and documented in connection with every procurement action above $5,000. - The policy does not clear provisions for maintaining detailed procurement records. Such records should include the rationale for the procurement method, the selection of contract type, the contractor selection or rejection process, and the basis for the contract price. - The simplified acquisition threshold is not defined and does not incorporate all relevant elements including sealed bids method. During our testing of 3 procurement transactions from a total of 20, we observed that, despite management's detailed historical background on each of the selected the necessary documentation evidencing compliance with PDA’s procurement standards was not retained. All the transactions tested were noncompetitive and thus single sourced. The total misstatement from these three transactions amounted to approximately $56,000 out of a total population of about $186,491. Furthermore, for these three vendors, which represented a 100% sample, we found no evidence of documentation for suspension and debarment verification. Although discussions with management suggested that all these transactions were properly conceived and evaluated at the time, there was no contemporaneous documentation to support this. Cause PDA’s procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Internal controls over maintaining sufficient records to detail the history of procurement including noncompetitive justification and suspension and debarment verification were found to be insufficient. Effect The policy did not fully conformed to the Uniform Guidance resulting to noncompliance issues such as records not sufficient to detail the history of procurement transactions. Questioned Costs $186,491 Repeat Finding No. Recommendation We recommend PDA implement measures to ensure that its procurement policy reflect applicable state and local laws and regulations conforming to applicable federal statutes and requirement in 2 CFR part 200. Management should ensure procurement transactions are documented in such detail to evidence the method of procurement use and vendor verification for suspension and debarment.
2 CFR § 1000.1 gives regulatory effect to the Department of Treasury for 2 CFR § 200.318 through 200.327 which describe specific procedures non-Federal entities must follow when entering into procurement transactions using Federal funds. 2 CFR § 200.318(a) indicates a non-Federal entity must have and use its own documented procurement procedures, consistent with State and local laws and regulations and the standards of 2 CFR § 200.318 through 200.327, for the acquisition of property or services required under a Federal award or subaward. 2 CFR § 200.320 indicates the non-Federal entity must use the following methods of procurement: (a) Procurement by micro-purchases, which the aggregate dollar amount does not exceed the non-Federal entity’s micro-purchase dollar threshold; (b) Procurement by small purchase procedures, which are procurements of relatively simple and informal nature, which do 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; (c) Procurement by sealed bids, which requires public solicitation of bids and a firm fixed price contract (lump-sum or unit price) is awarded to the responsible bidder whose bid, conforming with all material terms and conditions in the invitations to bid, is the lowest in price; (d) Procurement by competitive proposals, which is generally used when conditions are not appropriate for the use of sealed bids and is a procurement method in which either a fixed price or cost-reimbursement type contract is awarded; or (e) Procurement by non-competitive proposals, which are appropriate when an item can be obtained only from a single source, the non-competitive procurement is specifically authorized by the Federal awarding agency or pass-through entity, competition is deemed adequate after solicitation through competitive means, the aggregate amount of procurement does not exceed the micro-purchase threshold, and/or the public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation. 2 CFR § 200.318(i) indicates 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. 31 CFR § 19.300 indicates before entering into a covered transaction as defined in 31 CFR § 19 Subpart B, the non-Federal entity must ensure the expenditure is not made to an individual or business that is excluded or disqualified from receiving Federal funds by checking the Excluded Party List System (EPLS), collecting a certification from the individual or business, or adding a clause or condition to the contract. The City did not establish the necessary controls or policies to ensure proper compliance with Procurement requirements. For five of five procurements in excess of the City’s micro-purchase threshold which were entered into using Coronavirus State and Local Fiscal Recovery Funds (SLRF), the City did not maintain records sufficient to detail the history of the procurement. It was not evident if the City obtained quotes or bids for the items purchased or if a cost-price analysis was performed. Additionally, the City did not have written procurement procedures that conform to applicable laws noted above. Finally, the City did not ensure the vendors paid under covered transactions using SLRF funds were not excluded or disqualified from receiving Federal funds. The City should review the procurement requirements contained in 2 CFR § 200.318 through 200.327 and develop policies and procedures to ensure compliance. The City should maintain sufficient documentation to detail the history of the procurement, which may vary depending on the procurement method used. As a part of the procurement process, the City should include procedures for ensuring a vendor is not excluded or disqualified from receiving Federal funds and maintain documentation the procedure was followed.
CONDITION: The City of McKeesport contracted with Applied Concepts, Inc. for police trailers, and A&H Equipment for the purchase of a vactor truck. These contracts individually exceeded the Uniform Guidance micro purchase threshold of $10,000, but did not exceed the Simplified Acquisition Threshold of $250,000. Both of these purchases were procured through a cooperative purchasing group (COSTARS). The City was unable to 1) provide records sufficient to detail the history of procurement for these two contracts and 2) provide documentation to verify that price or rate quotations were obtained from an adequate number of qualified sources. CRITERIA: Section 2 CFR 200.320(a)(2)(i) of the Uniform Guidance prescribes the bidding requirements for equipment, supplies, and work of any nature made by a non-federal entity whereby the cost exceeds certain dollar thresholds as adjusted periodically. In instances where the cost incurred exceeds the Uniform Guidance micro purchase threshold of $10,000 but does not exceed the Simplified Acquisition Threshold of $250,000, price or rate quotations must be obtained from an adequate number of qualified sources. In addition, as specified in 2 CFR 200. 318(i) of the Uniform Guidance, the City must maintain sufficient records to detail the history of procurement. CAUSE: City personnel directly responsible for the oversight and execution of these procurements were not fully familiar with the procurement requirements as prescribed by Sections 2 CFR 200.320(a)(2)(i) and 2 CFR 200.318(i) of the Uniform Guidance. EFFECT: The City of McKeesport did not comply with the requirements of Sections 2 CFR 200.320(a)(2)(i) and 2 CFR 200.318(i) of the Uniform Guidance with regard to maintaining sufficient records to detail the history of procurement and conducting a cost or price analysis for a procurement in instances where the procurement cost incurred for goods and/or services exceeds the Uniform Guidance micro purchase threshold of $10,000 but does not exceed the Simplified Acquisition Threshold of $250,000. QUESTIONED COST: $246,867 RECOMMENDATION: I am recommending that City management implement, review and update annually as necessary, City federal financial policies and procedures, similar to those developed for use in the City’s Community Development Program to ensure In instances where the procurement cost incurred for goods and/or services exceeds the Uniform Guidance micro purchase threshold of $10,000 but does not exceed the Simplified Acquisition Threshold of $250,000, that 1) price or rate quotations are obtained from an adequate number of qualified sources, and 2) sufficient records are maintained to detail the history of procurement. These measures will enable the City to comply with the procurement requirements as prescribed Sections 2 CFR 200.320(a)(2)(i) and 2 CFR 200.318(i) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The City concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
Federal Program Name: Highway Planning and Construction Program Federal Agency: U.S. Department of Transportation Pass-through Entity: Indiana Department of Transportation Federal Assistance Listing Title and Number: Highway Planning and Construction Program, 20.205 Award Year: 2014, 2015, 2018 Criteria or Specific Requirement: Under Uniform Guidance compliance requirements for Procurement (2 CFR 200.318(i)), contract files must be 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. In cases where competition was limited, such as scenarios where specific qualifications and competence are required, the files should provide evidence that the limitation on competition was justified. Condition: The County entered into various professional services contracts for engineering and consulting services for its highway grant programs but did not maintain appropriate documentation to support its procurement decisions. Questioned Costs: $0 Context: During our testing of procurement requirements, 3 out of 3 projects selected for testing included contracts for engineering/consulting services. For 2 of the 3 contracts, the County selected based on qualifications/competence established by the state Department of Transportation rather than a formal RFP process but did not have appropriate documentation as evidence of their basis for conclusion. The other contract tested was subject to an RFP process but did not have appropriate documentation to support how the chosen firm was selected. Our sample was not, and was not intended to be, statistically valid. Effect: Contracts were approved without appropriate documentation to comply with Uniform Guidance requirements. Cause: Adequate supporting documentation on the procurements was not obtained or maintained within project or vendor files due to oversight in administration of the program. Repeat Finding: No Recommendation: We recommend the County revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. Views of Responsible Officials and Planned Corrective Action: See corrective action plan prepared by management attached.
Federal Program Name: Highway Planning and Construction Program Federal Agency: U.S. Department of Transportation Pass-through Entity: Indiana Department of Transportation Federal Assistance Listing Title and Number: Highway Planning and Construction Program, 20.205 Award Year: 2014, 2015, 2018 Criteria or Specific Requirement: Under Uniform Guidance compliance requirements for Procurement (2 CFR 200.318(i)), contract files must be 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. In cases where competition was limited, such as scenarios where specific qualifications and competence are required, the files should provide evidence that the limitation on competition was justified. Condition: The County entered into various professional services contracts for engineering and consulting services for its highway grant programs but did not maintain appropriate documentation to support its procurement decisions. Questioned Costs: $0 Context: During our testing of procurement requirements, 3 out of 3 projects selected for testing included contracts for engineering/consulting services. For 2 of the 3 contracts, the County selected based on qualifications/competence established by the state Department of Transportation rather than a formal RFP process but did not have appropriate documentation as evidence of their basis for conclusion. The other contract tested was subject to an RFP process but did not have appropriate documentation to support how the chosen firm was selected. Our sample was not, and was not intended to be, statistically valid. Effect: Contracts were approved without appropriate documentation to comply with Uniform Guidance requirements. Cause: Adequate supporting documentation on the procurements was not obtained or maintained within project or vendor files due to oversight in administration of the program. Repeat Finding: No Recommendation: We recommend the County revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. Views of Responsible Officials and Planned Corrective Action: See corrective action plan prepared by management attached.
Federal Program Name: Highway Planning and Construction Program Federal Agency: U.S. Department of Transportation Pass-through Entity: Indiana Department of Transportation Federal Assistance Listing Title and Number: Highway Planning and Construction Program, 20.205 Award Year: 2014, 2015, 2018 Criteria or Specific Requirement: Under Uniform Guidance compliance requirements for Procurement (2 CFR 200.318(i)), contract files must be 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. In cases where competition was limited, such as scenarios where specific qualifications and competence are required, the files should provide evidence that the limitation on competition was justified. Condition: The County entered into various professional services contracts for engineering and consulting services for its highway grant programs but did not maintain appropriate documentation to support its procurement decisions. Questioned Costs: $0 Context: During our testing of procurement requirements, 3 out of 3 projects selected for testing included contracts for engineering/consulting services. For 2 of the 3 contracts, the County selected based on qualifications/competence established by the state Department of Transportation rather than a formal RFP process but did not have appropriate documentation as evidence of their basis for conclusion. The other contract tested was subject to an RFP process but did not have appropriate documentation to support how the chosen firm was selected. Our sample was not, and was not intended to be, statistically valid. Effect: Contracts were approved without appropriate documentation to comply with Uniform Guidance requirements. Cause: Adequate supporting documentation on the procurements was not obtained or maintained within project or vendor files due to oversight in administration of the program. Repeat Finding: No Recommendation: We recommend the County revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. Views of Responsible Officials and Planned Corrective Action: See corrective action plan prepared by management attached.
Federal Program Name: Highway Planning and Construction Program Federal Agency: U.S. Department of Transportation Pass-through Entity: Indiana Department of Transportation Federal Assistance Listing Title and Number: Highway Planning and Construction Program, 20.205 Award Year: 2014, 2015, 2018 Criteria or Specific Requirement: Under Uniform Guidance compliance requirements for Procurement (2 CFR 200.318(i)), contract files must be 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. In cases where competition was limited, such as scenarios where specific qualifications and competence are required, the files should provide evidence that the limitation on competition was justified. Condition: The County entered into various professional services contracts for engineering and consulting services for its highway grant programs but did not maintain appropriate documentation to support its procurement decisions. Questioned Costs: $0 Context: During our testing of procurement requirements, 3 out of 3 projects selected for testing included contracts for engineering/consulting services. For 2 of the 3 contracts, the County selected based on qualifications/competence established by the state Department of Transportation rather than a formal RFP process but did not have appropriate documentation as evidence of their basis for conclusion. The other contract tested was subject to an RFP process but did not have appropriate documentation to support how the chosen firm was selected. Our sample was not, and was not intended to be, statistically valid. Effect: Contracts were approved without appropriate documentation to comply with Uniform Guidance requirements. Cause: Adequate supporting documentation on the procurements was not obtained or maintained within project or vendor files due to oversight in administration of the program. Repeat Finding: No Recommendation: We recommend the County revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. Views of Responsible Officials and Planned Corrective Action: See corrective action plan prepared by management attached.
Federal Program Name: Highway Planning and Construction Program Federal Agency: U.S. Department of Transportation Pass-through Entity: Indiana Department of Transportation Federal Assistance Listing Title and Number: Highway Planning and Construction Program, 20.205 Award Year: 2014, 2015, 2018 Criteria or Specific Requirement: Under Uniform Guidance compliance requirements for Procurement (2 CFR 200.318(i)), contract files must be 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. In cases where competition was limited, such as scenarios where specific qualifications and competence are required, the files should provide evidence that the limitation on competition was justified. Condition: The County entered into various professional services contracts for engineering and consulting services for its highway grant programs but did not maintain appropriate documentation to support its procurement decisions. Questioned Costs: $0 Context: During our testing of procurement requirements, 3 out of 3 projects selected for testing included contracts for engineering/consulting services. For 2 of the 3 contracts, the County selected based on qualifications/competence established by the state Department of Transportation rather than a formal RFP process but did not have appropriate documentation as evidence of their basis for conclusion. The other contract tested was subject to an RFP process but did not have appropriate documentation to support how the chosen firm was selected. Our sample was not, and was not intended to be, statistically valid. Effect: Contracts were approved without appropriate documentation to comply with Uniform Guidance requirements. Cause: Adequate supporting documentation on the procurements was not obtained or maintained within project or vendor files due to oversight in administration of the program. Repeat Finding: No Recommendation: We recommend the County revisit controls over this compliance requirement to ensure that appropriate documentation is gathered and retained within its procurement files to support all Federally funded purchasing decisions. Views of Responsible Officials and Planned Corrective Action: See corrective action plan prepared by management attached.
#2021-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2CFR 200.303) Travel (2CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with Uniform Guidance. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that Organization’s expenses are not in accordance with UGG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with Uniform Guidance. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2020-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with Uniform Guidance. View of responsible officials and planned corrective action Policies will be placed and adopted by the agency that meet the UG code. These policies will be placed in the fiscal manual. The fiscal manual will be created by using federal guidelines and by using the DDAP fiscal manual as guidance.
#2021-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2CFR 200.303) Travel (2CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with Uniform Guidance. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that Organization’s expenses are not in accordance with UGG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with Uniform Guidance. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2020-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with Uniform Guidance. View of responsible officials and planned corrective action Policies will be placed and adopted by the agency that meet the UG code. These policies will be placed in the fiscal manual. The fiscal manual will be created by using federal guidelines and by using the DDAP fiscal manual as guidance.
Criteria: A non-federal entity is required to have certain written policies and procedure in compliance with Uniform Guidance and must comply with the procurement standards as described in 2 CFR 200.318 through 2 CFR 200.327. Specifically, the non-federal entity must comply with the following: • 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. • If the non-Federal entity has a parent, affiliate, or subsidiary organization that is not a State, local government, or Indian tribe, the non-Federal entity must also maintain written standards of conduct covering organizational conflicts of interest. Organizational conflicts of interest means that because of relationships with a parent company, affiliate, or subsidiary organization, the non-Federal entity is unable or appears to be unable to be impartial in conducting a procurement action involving a related organization. Condition: AIRS does not appear to have created written purchasing or procurement policies and procedures as required by 2 CFR 200.318(a). Since AIRS is an affiliate organization of the Ethiopian Community Development Council (ECDC), it appears that the relationship between AIRS and ECDC meets the “affiliate” requirement under 2 CFR 200.318 (c) (2). It does appear that AIRS has created written standards of conduct covering organizational conflicts of interest. Cause: Management has not created or maintained certain written policies and procedures as required under 2 CFR 200.318. Effect: AIRS is not in compliance with certain written policies and procedures as required under 2 CFR 200.318. Questioned Costs: None reported Repeat Finding from Prior Year: No Recommendation: Management and board should create written procurement policies and procedures and written standards of conduct covering organizational conflicts of interest that comply with the procurement standards as required under 2 CFR 200.317 through 2 CFR 200.327. Views of Responsible Officials: Management concurs with this audit finding.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Child and Adult Care Food Program Assistance Listing Number: 10.558 Pass-Through Agency: Feeding Our Future Award Period: February 2021 – December 2021 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Adverse Opinion) Criteria or specific requirement: Nonfederal 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. Under these procurement standards, there must be written standards of conduct for employees involved in contracting, procurement transactions must be conducted in a manner providing full and open competition, and certain methods must be followed for soliciting bids or pricing. Additionally, under 2 CFR Part 180, which implements Executive Orders 12549 and 12689, nonfederal entities are prohibited from contracting with parties that are suspended or debarred and must follow certain procedures to verify that an entity is not suspended or debarred when it enters into a contract. Condition: The Organization does not have a procurement policy which complies with procurement requirements noted above. The organization did not have documentation supporting the selection of the vendors used for the program. Procurements did not provide full and open competition. There were not procedures to verify that an entity was not debarred, suspended, or otherwise excluded. Additionally, contracts did not contain required elements, such as pricing, type of meals, delivery, and schedule. The contract utilized for the largest vendor was very brief and did not follow the template contract that the State of Minnesota recommends. Questioned costs: Unknown Context: There were three vendors utilized for food purchases in the following amounts: (1) $2,276,877; (2) $325,801; and (3) $254,843. For all three vendors, no procurement or suspension and debarment procedures were performed. Cause: The Organization was not aware it was required to perform procurement or suspension and debarment procedures. Management indicated the contracting processes used were approved by its sponsor organization. Effect: It is unclear if the Organization received competitive pricing for its federal grant purchases. The auditors verified that vendors were not listed as suspended or debarred. Recommendation: We recommend the Organization familiarize itself with the procurement regulations prior to entering into any future federal grants and review state and federal guidance. Views of responsible officials: This program was initiated during the height of COVID, when guidelines on both state and federal levels were changing rapidly. Management provided auditors with documentation about vendors that had been approved by the sponsor organization. Management attended all trainings provided by the sponsor organization and followed all of the program sponsor guidelines. See the Corrective Action Plan for further details.
Finding 2021-002: Material Weakness – Lack of Documentation on Sole Source Contracts and Verification of Vendors Federal grantor: Department of Commerce Condition: The Chamber contract with a vendor on a sole-source basis and did not document justification for the use of a sole source vendor. In addition, the Chamber did not verify that the vendor was not on the list of vendors suspended or debarred from federal contracting before contracting with the vendor. Criteria: Entities are required to follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320 and noncompetitive procurements. Entities also must comply with 2 CFR Part 1326 that prohibits entities that have been debarred, suspended or voluntarily excluded from participating in Federal procurement. Cause: The Chamber’s Procurement Policy allows for a sole source vendor but requires staff to document sole source procurements prior to initial purchase. It appears staff did not follow its policy. The Policy also contains a requirement to verify or receive vendor certification that they are not debarred, suspended, ineligible or voluntarily excluded from Federal procurements, but this procedure was not followed. Effect: The Department of Commerce may impose additional conditions on the receipt of a subsequent tranche of future award funds, if any, or take other available remedies as set forth in 2 C.F.C. section 200.339. Recommendation: We recommend the Chamber review policies with staff to ensure procurement requirements are followed, and that staff are familiar with federal procurement requirements. Management’s Response: Management’s response to the finding is discussed in the Corrective Action Plan.