Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: PA0504L3T002110 - FY24, PA0504L3T002211 - FY24, PA0911L3T002103 - FY24, PA0911L3T002204 - FY24, PA1067L3T002200 - FY24 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Material Weakness in Internal Controls over Procurement, Suspension and Debarment Noncompliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Organization should have internal controls designed to ensure compliance with those provisions. 2 CFR section 200.318(c) and 48 CFR sections 52.203-13 and 52.303-16 requires entities to maintain standards of conduct that cover conflicts of interest and govern the performance of its employees engaged in the selection, award, and administration of contracts. Condition: We noted the Organization did not have adequate internal controls designed to ensure all vendors were compliant with the Organization’s conflict of interest policy, procurement, suspension and debarment requirements and the requirements of Uniform Guidance. Questioned Costs: Known: $74,275 Context: Lack of contracts, agreements and procurement procedures when acquiring vendors for federal grant expenditures. Through our testing of 40 vendors, we identified 4 which did not follow the proper procurement, suspension and debarment practices per federal requirements. Of these 4 vendors, we identified a total of $74,275 of known questioned costs within the program tested, and furthermore $190,515 of likely questioned costs based on the population. Cause: The Organization had procured vendors without following the required procurement, suspension and debarment procedures. Effect: The lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend that management review the procurement, suspension, and debarment requirements for federal programs as well as the organization's policies related to these areas. Management should ensure that such practices are being followed to comply with federal requirements. We also recommend that all current vendors in use are assessed and considered for compliance with procurement, suspension and debarment practices. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. See attached corrective action plan.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: PA0504L3T002110 - FY24, PA0504L3T002211 - FY24, PA0911L3T002103 - FY24, PA0911L3T002204 - FY24, PA1067L3T002200 - FY24 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Material Weakness in Internal Controls over Procurement, Suspension and Debarment Noncompliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Organization should have internal controls designed to ensure compliance with those provisions. 2 CFR section 200.318(c) and 48 CFR sections 52.203-13 and 52.303-16 requires entities to maintain standards of conduct that cover conflicts of interest and govern the performance of its employees engaged in the selection, award, and administration of contracts. Condition: We noted the Organization did not have adequate internal controls designed to ensure all vendors were compliant with the Organization’s conflict of interest policy, procurement, suspension and debarment requirements and the requirements of Uniform Guidance. Questioned Costs: Known: $74,275 Context: Lack of contracts, agreements and procurement procedures when acquiring vendors for federal grant expenditures. Through our testing of 40 vendors, we identified 4 which did not follow the proper procurement, suspension and debarment practices per federal requirements. Of these 4 vendors, we identified a total of $74,275 of known questioned costs within the program tested, and furthermore $190,515 of likely questioned costs based on the population. Cause: The Organization had procured vendors without following the required procurement, suspension and debarment procedures. Effect: The lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend that management review the procurement, suspension, and debarment requirements for federal programs as well as the organization's policies related to these areas. Management should ensure that such practices are being followed to comply with federal requirements. We also recommend that all current vendors in use are assessed and considered for compliance with procurement, suspension and debarment practices. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. See attached corrective action plan.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: PA0504L3T002110 - FY24, PA0504L3T002211 - FY24, PA0911L3T002103 - FY24, PA0911L3T002204 - FY24, PA1067L3T002200 - FY24 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Material Weakness in Internal Controls over Procurement, Suspension and Debarment Noncompliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Organization should have internal controls designed to ensure compliance with those provisions. 2 CFR section 200.318(c) and 48 CFR sections 52.203-13 and 52.303-16 requires entities to maintain standards of conduct that cover conflicts of interest and govern the performance of its employees engaged in the selection, award, and administration of contracts. Condition: We noted the Organization did not have adequate internal controls designed to ensure all vendors were compliant with the Organization’s conflict of interest policy, procurement, suspension and debarment requirements and the requirements of Uniform Guidance. Questioned Costs: Known: $74,275 Context: Lack of contracts, agreements and procurement procedures when acquiring vendors for federal grant expenditures. Through our testing of 40 vendors, we identified 4 which did not follow the proper procurement, suspension and debarment practices per federal requirements. Of these 4 vendors, we identified a total of $74,275 of known questioned costs within the program tested, and furthermore $190,515 of likely questioned costs based on the population. Cause: The Organization had procured vendors without following the required procurement, suspension and debarment procedures. Effect: The lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend that management review the procurement, suspension, and debarment requirements for federal programs as well as the organization's policies related to these areas. Management should ensure that such practices are being followed to comply with federal requirements. We also recommend that all current vendors in use are assessed and considered for compliance with procurement, suspension and debarment practices. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. See attached corrective action plan.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: PA0504L3T002110 - FY24, PA0504L3T002211 - FY24, PA0911L3T002103 - FY24, PA0911L3T002204 - FY24, PA1067L3T002200 - FY24 Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Material Weakness in Internal Controls over Procurement, Suspension and Debarment Noncompliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Organization should have internal controls designed to ensure compliance with those provisions. 2 CFR section 200.318(c) and 48 CFR sections 52.203-13 and 52.303-16 requires entities to maintain standards of conduct that cover conflicts of interest and govern the performance of its employees engaged in the selection, award, and administration of contracts. Condition: We noted the Organization did not have adequate internal controls designed to ensure all vendors were compliant with the Organization’s conflict of interest policy, procurement, suspension and debarment requirements and the requirements of Uniform Guidance. Questioned Costs: Known: $74,275 Context: Lack of contracts, agreements and procurement procedures when acquiring vendors for federal grant expenditures. Through our testing of 40 vendors, we identified 4 which did not follow the proper procurement, suspension and debarment practices per federal requirements. Of these 4 vendors, we identified a total of $74,275 of known questioned costs within the program tested, and furthermore $190,515 of likely questioned costs based on the population. Cause: The Organization had procured vendors without following the required procurement, suspension and debarment procedures. Effect: The lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend that management review the procurement, suspension, and debarment requirements for federal programs as well as the organization's policies related to these areas. Management should ensure that such practices are being followed to comply with federal requirements. We also recommend that all current vendors in use are assessed and considered for compliance with procurement, suspension and debarment practices. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. See attached corrective action plan.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – (FEDERAL ALN 10.553 AND 10.555) 2024-003 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires Universal Academy (the Academy) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the child nutrition cluster federal program. Condition – During our audit, we noted the Academy did not have sufficient controls in place within its child nutrition cluster federal program to ensure it was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – Not applicable. Context – For two of two vendors exceeding the federal threshold of $25,000, proper documentation of suspension and debarment testing was not maintained to ensure compliance with this requirement. This was not a statistically valid sample. Repeat Finding – This is a current and prior year finding. Cause – This was an oversight by academy personnel. Effect – Noncompliance with suspension and debarment requirements could result in the Academy expending federal funds inappropriately or utilizing vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the Academy review its internal control procedures relating to suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance in this area should include documentation of procurement policies and the Uniform Guidance requirements related to suspension and debarment. These controls should also include steps to ensure any vendor with which the Academy contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy will review and update its policies and procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The Academy has separately issued a Corrective Action Plan related to this finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – (FEDERAL ALN 10.553 AND 10.555) 2024-003 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires Universal Academy (the Academy) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the child nutrition cluster federal program. Condition – During our audit, we noted the Academy did not have sufficient controls in place within its child nutrition cluster federal program to ensure it was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – Not applicable. Context – For two of two vendors exceeding the federal threshold of $25,000, proper documentation of suspension and debarment testing was not maintained to ensure compliance with this requirement. This was not a statistically valid sample. Repeat Finding – This is a current and prior year finding. Cause – This was an oversight by academy personnel. Effect – Noncompliance with suspension and debarment requirements could result in the Academy expending federal funds inappropriately or utilizing vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the Academy review its internal control procedures relating to suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance in this area should include documentation of procurement policies and the Uniform Guidance requirements related to suspension and debarment. These controls should also include steps to ensure any vendor with which the Academy contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy will review and update its policies and procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – U.S. DEPARTMENT OF EDUCATION – PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COMPREHENSIVE LITERACY DEVELOPMENT, FEDERAL ALN 84.371 2024-001 Internal Control Over Compliance With Federal Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires that Aurora Charter School (the School) to establish and maintain effective internal control over compliance with requirements appliable to federal program expenditures, including suspension and drebarment requirements applicable to the Comprehensive Literacy Development federal program. Condition – During our audit, we noted the School did not have sufficient controls in place within its comprehensive literacy development federal program to ensure compliance with federal procurement requirements related to suspension and debarment and that it was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – None. Context – For one of one vendors exceeding the federal threshold of $25,000, the School did not document its compliance with procurement policies over suspension and debarment and documentation of compliance with suspension and debarment requirements was not maintained for one of one vendors tested to ensure compliance with this requirement in the current year. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – This was an oversight by school personnel. Effect – Noncompliance with suspension and debarment requirements could result in the School expending federal funds inappropriately or utilizing vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the School review its internal control procedures relating to suspension and debarment for the Comprehensive Literacy Development federal program. Internal controls over compliance for this area should include documentation of procurement policies over suspension and debarment. These controls should also include steps to ensure any vendor with which the School contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School will review and update its policies and procedures relating to suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The School has separately issued a Corrective Action Plan related to this finding.
Finding 2024-001 – COVID 19 – Coronavirus State and Local Fiscal Recovery Fund - AL No. 21.027 U.S. Department of Treasury Other Matters Related to Internal Control over Compliance of the Major Program Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition and Context: During our testing as it related to compliance with procurement we noted that an expense for engineering services for the Waste Water Treatment Assessment services charged to the major program would have required a formal bidding process as the project exceeded the simplified acquisition threshold. The Town had selected the engineering company for “On Call” engineering services as it related to the DPW through a request for qualifications process. The contract does include as part of the services to be provided Waste Water Treatment Assessment services. However, the contract is not specific to federally funded projects. The Town of Medfield had submitted the request for qualifications documentation as well as the executed contracted for “On Call” services to both the Town’s consulting service and the pass through entity for approval of the Waste Water Treatment Assessment. The pass through entity and the pass through entities Auditors did not have any concerns with the request for qualifications as it relates to the Waste Water Treatment Assessment project. Questioned Costs: $40,500 Cause: Based on the judgement of the pass through entity (Norfolk County) and their auditors, the Town was approved to procure engineering services for the Waste Water Treatment Assessment as part of a larger “On Call” services contract. The Town did select the contractor through a competitive request for qualifications process, but did not initiate a separate procurement for the sub-project. Effect or Potential Effect: There is risk that amounts charged to the federal awards major program may not be in accordance with procurement, suspension, and debarment principles. Identification as a Repeat Finding: N/A Recommendation: Going forward, the Town of Medfield should consider a separate bidding process for expenses related to federal grant funds. Management Response: Due to the differences in the interpretation of federal requirements regarding competitive procurement, the Town will follow the more restrictive one on an ongoing basis. New projects paid for by federal grants will have separate procurements.
2024-004 Procurement Federal Agency: All Federal Agencies - US Department of Transportation Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers - 20.205 Federal Award Identification Number and Year: N/A – applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matter Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The Town’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Effect: With the absence of a compliant policy, the Town is at risk for noncompliance as it relates to federal procurement. Cause: The Town was unaware that the policy was not compliant with Uniform Guidance. Repeat Finding: No Recommendation: We recommend that the Town review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials: Management agrees with this finding.
Assistance Listing Number, Federal Agency, and Program Name 21.027, U.S. Department of the Treasury, COVID 19 - Coronavirus State and Local Fiscal Recovery Funds, and 93.493, U.S. Department of Health and Human Services, Congressional Directives Federal Award Identification Number and Year 21.027 192908 and 93.493 6 CE2CS52794 01 07 Pass through Entity 21.027 Chicago Department of Public Health; 93.493 N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(i), the nonfederal 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. Per 2 CFR 200.319(a) All procurement transactions under the federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and § 200.320(b) covering formal procurement methods. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold (SAT), including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Finally, per 2 CFR 180.300, nonfederal entities must verify that outside parties are not suspended or debarred from engaging in federal activity before entering into a covered transaction. Condition Controls were not sufficient to ensure procurement activities were performed in accordance with 2 CFR 200 and management’s internal policies and procedures related to procurement, suspension, and debarment. Questioned Costs $ 237,890 If Questioned Costs are not Determinable, Description of why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported N/A Identification of How Questioned Costs Were Computed Questioned costs represent expenditures under these contracts reported on the SEFA. Context For three contracts in excess of the Organization's formal procurement threshold ($50,000), management did not retain documentation of having obtained the required number of competitive bids or document rationale for sole procurement, did not document the history of procurement decisions, and was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Cause and Effect A lack of controls to ensure required procurement activities were performed could result in material noncompliance with federal procurement standards. Recommendation We recommend that management retain documented evidence that its policies and procedures were followed to ensure compliance with federal procurement standards. Additionally, we recommend management review its internal procurement policy regularly to ensure compliance with federal procurement standards under 2 CFR 200.317 through 200.327. Views of Responsible Officials and Corrective Action Plan Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Careful consideration was done in selecting the vendors to look at obtaining the best cost for the value of the service as IWS was responsible for a portion of the expenses. Necessary revisions will be made to the existing procurement processes and controls in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name 21.027, U.S. Department of the Treasury, COVID 19 - Coronavirus State and Local Fiscal Recovery Funds, and 93.493, U.S. Department of Health and Human Services, Congressional Directives Federal Award Identification Number and Year 21.027 192908 and 93.493 6 CE2CS52794 01 07 Pass through Entity 21.027 Chicago Department of Public Health; 93.493 N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(i), the nonfederal 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. Per 2 CFR 200.319(a) All procurement transactions under the federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and § 200.320(b) covering formal procurement methods. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold (SAT), including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Finally, per 2 CFR 180.300, nonfederal entities must verify that outside parties are not suspended or debarred from engaging in federal activity before entering into a covered transaction. Condition Controls were not sufficient to ensure procurement activities were performed in accordance with 2 CFR 200 and management’s internal policies and procedures related to procurement, suspension, and debarment. Questioned Costs $ 237,890 If Questioned Costs are not Determinable, Description of why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported N/A Identification of How Questioned Costs Were Computed Questioned costs represent expenditures under these contracts reported on the SEFA. Context For three contracts in excess of the Organization's formal procurement threshold ($50,000), management did not retain documentation of having obtained the required number of competitive bids or document rationale for sole procurement, did not document the history of procurement decisions, and was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Cause and Effect A lack of controls to ensure required procurement activities were performed could result in material noncompliance with federal procurement standards. Recommendation We recommend that management retain documented evidence that its policies and procedures were followed to ensure compliance with federal procurement standards. Additionally, we recommend management review its internal procurement policy regularly to ensure compliance with federal procurement standards under 2 CFR 200.317 through 200.327. Views of Responsible Officials and Corrective Action Plan Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Careful consideration was done in selecting the vendors to look at obtaining the best cost for the value of the service as IWS was responsible for a portion of the expenses. Necessary revisions will be made to the existing procurement processes and controls in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Finding No. 2024-004 Procurement Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRFP4547 – 2021 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The Town must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micropurchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Condition: The Town purchasing policy does not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs: None Context: Although the Town’s purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 7 of 7 procurement transactions tested. Cause: Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect: The Town is at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding: No Recommendation: We recommend that the Town update its procurement policies to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials: Management is working with our current auditors to update the Town’s procurement policies to be in compliance with the Uniform Guidance.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
Procurement and Suspension and Debarment Finding Number: 2024-001 Assistance Listing Number and Title COVID-19 Coronavirus State and Local Fiscal Recovery Funds – AL #21.027 Federal Award Identification Number / Year: 2024 Federal Agency: U.S. Department of Treasury Compliance Requirement: Procurement and Suspension and Debarment Pass-Through Entity: Ohio Facilities Construction Commission Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR 1000.10 gives regulatory effect to the U.S. 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 § 1400.332 requires participants to include a term or condition in lower-tier transactions requiring lower-tier participants to comply with Subpart C of the OMB Guidance in 2 CFR Part 180. 2 CFR Part 180, Subpart C, Paragraph 300 instructs, "when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Additionally, in 31 CFR § 19.300, the U.S. Department of Treasury requires participants entering into a covered transaction with another person at the next lower tier, to verify that the person with whom they intend to do business is not excluded or disqualified by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person. Additionally, District Policy: PROCUREMENT - FEDERAL GRANTS/FUNDS, states that for contracts over $25,000, the District shall confirm that the vendor is not debarred or suspended by either checking the Federal government's System for Award Management, which maintains a list of such debarred or suspended vendors at www.sam.gov; collecting a certification from the vendor; or adding a clause or condition to the covered transaction with that vendor. The District did not have the proper internal controls in place to verify that all entities, with whom the District had entered into covered transactions, had not been suspended or debarred. During testing of Ohio K-12 School Safety Grant – Public School Districts, we noted the District entered into two out of four contracts with vendors for more than $25,000, and there was no evidence the District checked the SAM exclusions, collected a certification from the entity, or added a clause or condition to the covered transaction with the vendor. Due to the deficient internal control structure, the required verifications were not completed for the two covered transactions during Fiscal Year 2024. Failing to have the appropriate controls in place may result in vendors receiving federal funds that are suspended or debarred. Prior to entering into covered transactions, the District should verify the vendor is not suspended or debarred by checking the SAM exclusions, collecting a certification from the vendor, or adding a clause or condition to the covered transaction with the vendor.
Procurement and Suspension and Debarment Finding Number: 2024-003 Assistance Listing Number and Title COVID-19 Coronavirus State and Local Fiscal Recovery Funds – AL #21.027 Federal Award Identification Number / Year: 2024 Federal Agency: U.S. Department of Treasury Compliance Requirement: Procurement and Suspension and Debarment Pass-Through Entity: Ohio Facilities Construction Commission Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR 1000.10 gives regulatory effect to the U.S. 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 200.324(a) requires a cost or price analysis be performed for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis conducted depend on the facts surrounding the particular procurement transaction. 2 CFR 200.324(c) states that the “cost plus a percentage of cost” and “percentage of construction costs” methods of contracting must not be used. Additionally, District Policy: PROCUREMENT - FEDERAL GRANTS/FUNDS, states that the District shall perform a cost or price analysis in connection with every procurement action in excess of $250,000, including contract modifications. A cost analysis generally means evaluating the separate cost elements that make up the total price, while a price analysis means evaluating the total price, without looking at the individual cost elements. The method and degree of analysis are dependent on the facts surrounding the particular procurement situation; however, the District shall come to an independent estimate prior to receiving bids or proposals. The District did not have the proper internal controls in place to perform a cost or price analysis for procurements in excess of $250,000. During testing of Ohio K-12 School Safety Grant – Public School Districts, we noted the District used the sealed bid procurement to award a project in excess of $250,000, and there was no evidence the District performed a cost or price analysis. Due to the deficient internal control structure, the required cost or price analysis was not completed for the procurement action covering a transaction made in Fiscal Year 2024. Failing to have the appropriate controls in place may result in rewarding contracts to vendors whose bids or proposals are not the most responsive and responsible. The District should perform a cost or price analysis for all procurement actions in excess of $250,000.
Finding 2024-002 – Procurement, Suspension, and Debarment Identification of the federal program: Federal Grantor: United States Department of Health and Human Services Assistance Listing No.: 93.493, Congressional Directives Federal Award Number: 1 CE1HS52357‐01‐00 Federal Award Period of Performance: 09/30/2023–09/29/2026 Criteria or specific requirement (including statutory, regulatory, or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: Procurement policies required by 2 CFR 200.318-326 were not formally documented. Documentation was not consistently retained evidencing the review and approval of new vendors for suspension and debarment prior to adding them into PeopleSoft, CFNI’s vendor management platform. Management represented that they performed a monthly reconciliation of the number of vendors screened and the number of vendors submitted to the third-party, however, management did not retain evidence of the reviews in fiscal year 2024. CFNI’s third-party contractor for suspension and debarment does not have a SOC 1 (System and Organization Controls Report) report that covers the controls over suspension and debarment services provided. Management did not perform testing over the results of the third-party contractor to assess the accuracy of its procedures. Effect or potential effect: Suspension and debarment results provided by the third-party contractor may not be accurate. As a result, federal funds may be used to pay a contractor that is suspended or debarred. Questioned costs: None. Context: For three of 40 new vendors sampled during the fiscal year, the documentation evidencing the review of new vendors for suspension and debarment was not retained. For Assistance Listing No. 93.493, the federal portion of procurement expenditures subject to suspension and debarment review totaled $1,441,622, which represents approximately 61.5% of total federal expenditures of $2,341,797 reported in the SEFA for the year ended June 30, 2024. Identification as a repeat finding, if applicable: This is not a repeat finding from the prior year. Recommendation: CFNI should revise its procurement policies to be in compliance with 2 CFR 200.318-326. CFNI should implement procedures to reperform the testing for a sample of vendors from the third-party suspension and debarment results to ensure the accuracy of the results received. CFNI should formalize the documentation of the reconciliation of the number of vendors screened and the number of vendors submitted to the third-party. CFNI should update its policies and procedures over the new vendor setup process to require supporting documentation related to the suspension and debarment search performed be maintained. Views of responsible officials: The audit identified three instances out of 40 sampled where CFNI did not retain documentation verifying that suspension and debarment reviews were conducted during the onboarding of new suppliers. Although CFNI has an established vetting process, it recognizes the need for consistent documentation to evidence compliance. CFNI will implement formalized procedures to ensure all suspension and debarment reviews are documented and retained for audit purposes. CFNI engages a third-party contractor to monitor its supplier list against suspension and debarment databases. While the vendor provided a SOC 1 report, it did not specifically cover the suspension and debarment services provided. Additionally, CFNI did not conduct testing to validate the accuracy of the third-party's results. CFNI will revise its vendor management practices to ensure the SOC 1 reports cover the relevant services, and it will establish testing procedures to confirm the reliability of the vendor's outputs. Although CFNI utilizes two processes to monitor active suppliers against suspension and debarment lists, no reconciliation was documented to confirm that the supplier lists provided to and received from the third party were complete and accurate. Additionally, no testing was conducted to validate the third party’s work. CFNI will implement a reconciliation process to verify the completeness and accuracy of supplier lists before and after third-party reviews. Furthermore, it will establish a sampling and testing procedure to validate the results provided by external vendors.
Finding 2024-006: Significant Deficiency- Procurement and Suspension, and Debarment - Internal Control over Procurement Documentation Assistance Listing Program Title and Number- Lead Hazard Reduction Program 14.900 Federal Agency- Department of Housing and Urban Development Pass-through Entity- N/A Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Uniform Guidance) requires compliance with provisions of procurement, suspension, and debarment. Non-federal entities must meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. Condition: During our audit, we noted that the City did not have the bid documentation for one of our selections. Cause: While the City has a formal policy requiring the purchasing department to maintain all bid documentation it could not locate the one selection. Effect: Without documented evidence the City could not provide evidence of this control being completed. Questioned Cost: None Context: See condition above for context for the finding. There was no documentation available for 1 out of 8 selections tested. Repeating Finding: No Recommendation: We recommend that the City enforce its policy to maintain all procurement documentation. Views of responsible officials of the auditee: Management agrees with the finding and recommendation.
2024-009 – Material Weakness and Material Noncompliance – Procurement and Suspension and Debarment U.S. Department of Agriculture Passed through State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program Criteria: Per 2 CFR Part 200.320, “There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319.” 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Uniform Guidance) requires compliance with provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The Town did not have documentation to support they complied with their purchasing policy or Uniform Guidance procurement requirements for three out of six selections. The Town did not have documentation to support it verified four vendors were not suspended or debarred for 4 out of 4 selections. Cause: Due to significant staff turnover within the Greenwich Public Schools finance function during the audit period, established controls related to procurement were not consistently applied or effectively monitored. Effect: Documentation of the requirement for procurement was not maintained. Questioned costs: $119,367 Context: See condition above. Identification as a repeat finding is applicable: N/A Recommendation: We recommend the Town develop and implement a comprehensive plan to address key personnel turnover. This plan should include clearly documented policies and procedures and appropriate cross-training to ensure continuity of operations and maintain adequate internal controls and retention of records. View of Responsible Officials: We agree with the finding. See corrective action plan.
2024-009 – Material Weakness and Material Noncompliance – Procurement and Suspension and Debarment U.S. Department of Agriculture Passed through State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program Criteria: Per 2 CFR Part 200.320, “There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319.” 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Uniform Guidance) requires compliance with provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The Town did not have documentation to support they complied with their purchasing policy or Uniform Guidance procurement requirements for three out of six selections. The Town did not have documentation to support it verified four vendors were not suspended or debarred for 4 out of 4 selections. Cause: Due to significant staff turnover within the Greenwich Public Schools finance function during the audit period, established controls related to procurement were not consistently applied or effectively monitored. Effect: Documentation of the requirement for procurement was not maintained. Questioned costs: $119,367 Context: See condition above. Identification as a repeat finding is applicable: N/A Recommendation: We recommend the Town develop and implement a comprehensive plan to address key personnel turnover. This plan should include clearly documented policies and procedures and appropriate cross-training to ensure continuity of operations and maintain adequate internal controls and retention of records. View of Responsible Officials: We agree with the finding. See corrective action plan.
FA 2024-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Numbers: 225GA324N1099 (Year: 2024), 245GA324N1199 (Year 2024) Questioned Costs: $77,285 Repeat of Prior Year Finding: FA 2023-001 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were reviewed and approved and that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $2,251,765 were expended and reported on the Berrien County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Condition: A sample of 60 expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For three expenditures, evidence of review and approval was not reflected within the voucher package. • For seven expenditures, there was no verification of receipt of goods documented in the voucher package. Additionally, auditor reviewed 40 of these same expenditures and a sample of 20 additional expenditures, which was randomly selected for testing using a non-statistical sampling approach, to determine if procurement transactions complied with the School District’s procurement procedures and proper oversight was maintained to ensure that contractors were performing according to their contracts. The following deficiencies were noted: • Evidence of review and approval was not reflected within the voucher package for five additional expenditures. • For 19 expenditures paid to four different vendors, documentation could not be provided to support the entity’s verification that the vendors were not suspended or debarred or otherwise excluded from participating in the transactions. • One vendor contract expired mid-year and no renewal or extension was initiated. Questioned Costs: Known questioned costs of $77,285 were identified for procurement transactions that did not follow the School District’s procurement procedures and were incurred under an expired contract for which no renewal or extension was initiated. These known questioned costs related to all expenditures occurring after contract expiration, and therefore, should not be projected to a population to determine likely questioned costs. Cause: When discussing the issues noted with management, they said the program director was new and was unaware of the compliance requirements. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance related to CNC. Failure to ensure that expenditures are appropriately approved and procedures to address procurement and suspension and debarment compliance requirements are implemented exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds for unallowable purposes and/or with unqualified vendors. In addition, this deficiency could lead to the return of funding associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to CNC. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review and approval, required procurement methods are properly identified and followed, and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Numbers: 225GA324N1099 (Year: 2024), 245GA324N1199 (Year 2024) Questioned Costs: $77,285 Repeat of Prior Year Finding: FA 2023-001 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were reviewed and approved and that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $2,251,765 were expended and reported on the Berrien County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Condition: A sample of 60 expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For three expenditures, evidence of review and approval was not reflected within the voucher package. • For seven expenditures, there was no verification of receipt of goods documented in the voucher package. Additionally, auditor reviewed 40 of these same expenditures and a sample of 20 additional expenditures, which was randomly selected for testing using a non-statistical sampling approach, to determine if procurement transactions complied with the School District’s procurement procedures and proper oversight was maintained to ensure that contractors were performing according to their contracts. The following deficiencies were noted: • Evidence of review and approval was not reflected within the voucher package for five additional expenditures. • For 19 expenditures paid to four different vendors, documentation could not be provided to support the entity’s verification that the vendors were not suspended or debarred or otherwise excluded from participating in the transactions. • One vendor contract expired mid-year and no renewal or extension was initiated. Questioned Costs: Known questioned costs of $77,285 were identified for procurement transactions that did not follow the School District’s procurement procedures and were incurred under an expired contract for which no renewal or extension was initiated. These known questioned costs related to all expenditures occurring after contract expiration, and therefore, should not be projected to a population to determine likely questioned costs. Cause: When discussing the issues noted with management, they said the program director was new and was unaware of the compliance requirements. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance related to CNC. Failure to ensure that expenditures are appropriately approved and procedures to address procurement and suspension and debarment compliance requirements are implemented exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds for unallowable purposes and/or with unqualified vendors. In addition, this deficiency could lead to the return of funding associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to CNC. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review and approval, required procurement methods are properly identified and followed, and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
2 CFR § 400.1 gives regulatory effect for the U.S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.320(a)(2) indicates, in part, when the aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold, but does not exceed the simplified acquisition threshold, simplified acquisition procedures can be used. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined by the recipient or subrecipient. 2 CFR § 200.318(i) indicates the non-Federal entity must maintain records sufficient to detail the history of procurement transaction. These records must 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. Perkins Local School District Board Policy DECA - Administration of Federal Grant Funds indicates all purchases for property and services made using federal funds must be conducted in accordance with all applicable Federal, State and local laws and regulations, the Uniform Guidance, and the District’s written policies and procedures. Purchasing records are sufficiently maintained to detail the history of all procurements and must include at least the rationale for the method of procurement, selection of contract type, and contractor selection or rejection; the basis for the contract price; and verification that the contractor is not suspended or debarred. Furthermore, Perkins Local School District Board Policy DJC - Bidding Requirements states that if feasible, all purchases over $5,000 but under $50,000 will be based on price quotations submitted by at least three vendors. Due to a lack of controls over the procurement process, for one out of four (25%) vendors examined during testing of the Child Nutrition Cluster, the District did not obtain quotes from other vendors. The procurements totaled $9,376; therefore, the District’s bidding policy required the District to obtain “quotations submitted by at least three vendors.” Failure to obtain quotations from a variety of vendors may result in the District not utilizing the most cost effective vendor as well as further noncompliance with Federal requirements. The District should adopt procedures to help ensure records are maintained to document the history of the procurement, including the rationale for the purchase method, selection of vendors, cost/price analysis (if applicable) and the reason for limiting competition (if applicable).
2 CFR § 400.1 gives regulatory effect for the U.S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.320(a)(2) indicates, in part, when the aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold, but does not exceed the simplified acquisition threshold, simplified acquisition procedures can be used. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined by the recipient or subrecipient. 2 CFR § 200.318(i) indicates the non-Federal entity must maintain records sufficient to detail the history of procurement transaction. These records must 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. Perkins Local School District Board Policy DECA - Administration of Federal Grant Funds indicates all purchases for property and services made using federal funds must be conducted in accordance with all applicable Federal, State and local laws and regulations, the Uniform Guidance, and the District’s written policies and procedures. Purchasing records are sufficiently maintained to detail the history of all procurements and must include at least the rationale for the method of procurement, selection of contract type, and contractor selection or rejection; the basis for the contract price; and verification that the contractor is not suspended or debarred. Furthermore, Perkins Local School District Board Policy DJC - Bidding Requirements states that if feasible, all purchases over $5,000 but under $50,000 will be based on price quotations submitted by at least three vendors. Due to a lack of controls over the procurement process, for one out of four (25%) vendors examined during testing of the Child Nutrition Cluster, the District did not obtain quotes from other vendors. The procurements totaled $9,376; therefore, the District’s bidding policy required the District to obtain “quotations submitted by at least three vendors.” Failure to obtain quotations from a variety of vendors may result in the District not utilizing the most cost effective vendor as well as further noncompliance with Federal requirements. The District should adopt procedures to help ensure records are maintained to document the history of the procurement, including the rationale for the purchase method, selection of vendors, cost/price analysis (if applicable) and the reason for limiting competition (if applicable).
2 CFR § 400.1 gives regulatory effect for the U.S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.320(a)(2) indicates, in part, when the aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold, but does not exceed the simplified acquisition threshold, simplified acquisition procedures can be used. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined by the recipient or subrecipient. 2 CFR § 200.318(i) indicates the non-Federal entity must maintain records sufficient to detail the history of procurement transaction. These records must 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. Perkins Local School District Board Policy DECA - Administration of Federal Grant Funds indicates all purchases for property and services made using federal funds must be conducted in accordance with all applicable Federal, State and local laws and regulations, the Uniform Guidance, and the District’s written policies and procedures. Purchasing records are sufficiently maintained to detail the history of all procurements and must include at least the rationale for the method of procurement, selection of contract type, and contractor selection or rejection; the basis for the contract price; and verification that the contractor is not suspended or debarred. Furthermore, Perkins Local School District Board Policy DJC - Bidding Requirements states that if feasible, all purchases over $5,000 but under $50,000 will be based on price quotations submitted by at least three vendors. Due to a lack of controls over the procurement process, for one out of four (25%) vendors examined during testing of the Child Nutrition Cluster, the District did not obtain quotes from other vendors. The procurements totaled $9,376; therefore, the District’s bidding policy required the District to obtain “quotations submitted by at least three vendors.” Failure to obtain quotations from a variety of vendors may result in the District not utilizing the most cost effective vendor as well as further noncompliance with Federal requirements. The District should adopt procedures to help ensure records are maintained to document the history of the procurement, including the rationale for the purchase method, selection of vendors, cost/price analysis (if applicable) and the reason for limiting competition (if applicable).
Finding: Procurement and Suspension & Debarment Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Year: 2024 Award Number: G757HMWE8ET8 Criteria: In accordance with 2 CFR 200.318, non-Federal entities must have and use documented procurement procedures, consistent with State and local 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 2 CFR 200.317 through 200.327. The Organization's procurement policy requires for purchases in excess of $5,000 to obtain three competitive bids before purchase order is placed. In addition, it states that CFR 200's procurement standards are the guiding legislation. Condition: During testing of procurement and suspension & debarment, it was noted: a. Client could not provide support to show why the particular vendor was chosen. b. No mention of suspension or debarment checks are contained in the policies and no support for checks is maintained. Questioned Costs: $148,737; based on one item below that was tested for procurement and suspension & debarment. Context: One small purchase procurement vendor was selected which used CSLFRF funds during fiscal year 2024 in the amount of $148,737 and noted the above issues. A non-statistical sampling methodology was used to select the sample. Cause: The Organization did not have adequate documentation to support the Organizations procurement decisions. Effect: The Organization did not have adequate internal controls in place which resulted in a purchase without adherence to the Organization's own procurement policies and the Uniform Guidance. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that the Organization follow its procurement procedures for the acquisition of property or services as required under a Federal award or sub-award. We also recommend updating the policies to include guidance for suspension and debarment checks as well as establishing ways to maintain documentation of those checks. Views of responsible officials: The Organization agrees with the finding. See separate report for planned corrective actions.
Finding: Procurement and Suspension & Debarment Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Year: 2024 Award Number: G757HMWE8ET8 Criteria: In accordance with 2 CFR 200.318, non-Federal entities must have and use documented procurement procedures, consistent with State and local 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 2 CFR 200.317 through 200.327. The Organization's procurement policy requires for purchases in excess of $5,000 to obtain three competitive bids before purchase order is placed. In addition, it states that CFR 200's procurement standards are the guiding legislation. Condition: During testing of procurement and suspension & debarment, it was noted: a. Client could not provide support to show why the particular vendor was chosen. b. No mention of suspension or debarment checks are contained in the policies and no support for checks is maintained. Questioned Costs: $148,737; based on one item below that was tested for procurement and suspension & debarment. Context: One small purchase procurement vendor was selected which used CSLFRF funds during fiscal year 2024 in the amount of $148,737 and noted the above issues. A non-statistical sampling methodology was used to select the sample. Cause: The Organization did not have adequate documentation to support the Organizations procurement decisions. Effect: The Organization did not have adequate internal controls in place which resulted in a purchase without adherence to the Organization's own procurement policies and the Uniform Guidance. Identification as a repeat finding: Not a repeat finding. Recommendation: We recommend that the Organization follow its procurement procedures for the acquisition of property or services as required under a Federal award or sub-award. We also recommend updating the policies to include guidance for suspension and debarment checks as well as establishing ways to maintain documentation of those checks. Views of responsible officials: The Organization agrees with the finding. See separate report for planned corrective actions.
Federal Program: 20.509 Formula Grants for Rural Areas and Tribal Transit Program Grant No: Grant Period: Year ended June 30, 2024 Condition: The program, operated as a fund of the county, leases transit vehicles from another fund of the county. At the inception of the lease, the County sought proposals for the lease of transit vehicles from businesses engaged in transit vehicle leasing activity and determined that purchasing transit vehicles would be the most cost effective option. However, the County structured the agreement for transit vehicles to be purchased by another fund and lease the vehicles to the transit program at an increased price with substantial benefit to the transit program. Criteria: 2 CFR 200.318(c) requires the county officials avoid participation in selection, award, or administration of contract when a conflict of interest is present. Cause: County management has responsibility to effectively manage resources for the entire County. It appears the County’s judgement was impaired when weighing the cost of the lease to the transit program with the benefit to County. Effect: The cost of current, past and future lease payments are not in compliance with 2 CFR 200.318(c). Context and Questioned Cost: All transit vehicles are leased by the Transit Service Fund under one lease. Total payments to be made by the Transit Service fund for the duration of the lease term is $1,588,774. Total payments to be made for the purchase of vehicles by the General fund under a lease/purchase contract is $1,143,986. As of June 30, 2024, lease payments made for the purchase of the transit vehicles by the General Fund have not exceeded the amounts paid and charged to expense by the Transit Service Fund. As such, there is no questioned cost. Repeat Finding: No Recommendation: We recommend the county review and modify the terms of the lease between the transit program and the county fund. We also recommend consulting with the program oversight agency to determine any necessary correction action. Views of Responsible Officials: The County reviewed acceptable all possibilities for the acquisition of transit vehicles for the transit program and sought advise and acceptance for the method and structure chosen from the County’s program oversight agency. We believed these lease transactions to be in compliance with program requirements. We will further review the matter, discuss further with the oversight agency, and any issues determined by the oversight agency.
Finding Number: 2024-007 Program: Coronavirus State and Local Fiscal Recovery Funds ALN #: 21.027 Pass-through Entity: N/A- Direct Award Federal Agency: U.S. Department of Treasury Federal Awar Year: July 1, 2023–June 30, 2024 Compliance Requirement: Procurement Type of finding: Material weakness and noncompliance Criteria Recipients may use awarded funds to enter into contracts to procure goods and services necessary to implement one or more of the eligible purposes outlined in 42 USC sections 802(c) and 803(c) and Treasury’s 2021 Interim Final Rule, and 2022 Final Rule, and 2023 Interim Final Rule. Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. According to 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition For three of seven selections, we noted that the City did not follow the proper procurement policies as outlined in the Massachusetts General Law Chapter 30B. One exception related to a vendor that had cumulative expenditures greater than $10,000 in FY24. This vendor did not have a related contract for these expenditures and therefore the City did not follow procurement policies. Two additional exceptions relate to sole-source procurements with contract values greater than $50,000. Per Chapter 30B, sole-source procurements of more the $50,000 cannot be completed unless the contract relates to software maintenance, library books, and educational materials. These contracts did not relate to any of the beforementioned categories. Additionally, the City did not have documentation to show that a reasonable services. As such, a sole-source procurement method was not in compliance with Chapter 30B of the Massachusetts General Law. Cause The nature and reason for the noncompliance is attributed to oversight error on the City's part for not entering into contracts/maintaining procurement documentation appropriately. The City enters into hundreds of contracts annually funded with the ARPA program, all of which are manually reviewed. Therefore, it is likely that human error caused the noncompliance. Proper perspective The City’s policy is to follow the Massachusetts General Law Chapter 30B when procuring goods and services. Out of a sample size of seven, we noted that three of the vendors were not properly procured, as described in the conditions found. Possible asserted effect Not following the proper procurement policies, as outlined in Chapter 30B, could cause the City to inappropriately award a contract to a vendor. Questioned costs None noted Statistical sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat finding A similar finding was not reported in the prior year. Recommendation We recommend the City to review the procurement policies and ensure that expenditures for vendors that exceed $10,000 follow the correct procurement policies and procedures. Additionally, sole source bids require the City to follow certain policies and procedures. Views of responsible officials and corrective actions The City has updated its procurement process in FY2025 to ensure that expenditures for vendors that exceed $10,000 and sole source contracts follow the correct procurement policies and procedures in accordance with MGL 30B. investigation occurred that showed only one, or all vendors contracted with, could provide the required
2024-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College will follow its policies as required.
2024-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College will follow its policies as required.
2024-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College will follow its policies as required.
2024-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College will follow its policies as required.
2024-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College will follow its policies as required.
Federal Transit Cluster – Procurement and Suspension and Debarment Noncompliance and Significant Deficiency in Internal Control ALN 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: Per 2 CFR § 200.318(i), non-Federal entities must maintain records sufficient to detail the history of a 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, 2 CFR Part 180 requires that contracts be awarded only to responsible contractors. Verification of responsibility includes checking the System for Award Management (SAM.gov) or obtaining certifications. Under Appendix II to 2 CFR Part 200, contracts made under federal awards must include specific provisions, including those related to termination, lobbying, and Buy America certifications, where applicable. Condition: In its procurement files, the Authority’s had missing documentation of procurement history, absence of required contract clauses, lack of evidence of contractor responsibility determination and missing lobbying and Buy America certifications. Cause: The Authority did not have adequate internal controls in place to ensure compliance with federal procurement requirements, including documentation, contractor responsibility verification, and inclusion of required contract clauses and certifications. Effect: The absence of required documentation, verifications, and certifications opened the Authority to increased risk of noncompliance with federal procurement standards, potential ineligibility of costs, and exposure to audit disallowances or grant repayment. Questioned Costs: None identified. Context: For one out of ten transactions tested exceeding the micro-purchase threshold, the Authority failed to maintain a complete record of the procurement history and its determination on the status of the contractor responsibility and was missing required clauses and certifications in the contract details. Recommendation: We recommend that the Authority implement comprehensive internal control procedures over procurement to ensure compliance with federal requirements. This should include maintaining complete procurement documentation, verifying contractor responsibility through SAM.gov or equivalent, including all required federal clauses and certifications in solicitations and contracts, and providing adequate training to procurement staff on federal requirements and documentation standards. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Procurement and Suspension and Debarment Noncompliance and Significant Deficiency in Internal Control ALN 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: Per 2 CFR § 200.318(i), non-Federal entities must maintain records sufficient to detail the history of a 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, 2 CFR Part 180 requires that contracts be awarded only to responsible contractors. Verification of responsibility includes checking the System for Award Management (SAM.gov) or obtaining certifications. Under Appendix II to 2 CFR Part 200, contracts made under federal awards must include specific provisions, including those related to termination, lobbying, and Buy America certifications, where applicable. Condition: In its procurement files, the Authority’s had missing documentation of procurement history, absence of required contract clauses, lack of evidence of contractor responsibility determination and missing lobbying and Buy America certifications. Cause: The Authority did not have adequate internal controls in place to ensure compliance with federal procurement requirements, including documentation, contractor responsibility verification, and inclusion of required contract clauses and certifications. Effect: The absence of required documentation, verifications, and certifications opened the Authority to increased risk of noncompliance with federal procurement standards, potential ineligibility of costs, and exposure to audit disallowances or grant repayment. Questioned Costs: None identified. Context: For one out of ten transactions tested exceeding the micro-purchase threshold, the Authority failed to maintain a complete record of the procurement history and its determination on the status of the contractor responsibility and was missing required clauses and certifications in the contract details. Recommendation: We recommend that the Authority implement comprehensive internal control procedures over procurement to ensure compliance with federal requirements. This should include maintaining complete procurement documentation, verifying contractor responsibility through SAM.gov or equivalent, including all required federal clauses and certifications in solicitations and contracts, and providing adequate training to procurement staff on federal requirements and documentation standards. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Procurement and Suspension and Debarment Noncompliance and Significant Deficiency in Internal Control ALN 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: Per 2 CFR § 200.318(i), non-Federal entities must maintain records sufficient to detail the history of a 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, 2 CFR Part 180 requires that contracts be awarded only to responsible contractors. Verification of responsibility includes checking the System for Award Management (SAM.gov) or obtaining certifications. Under Appendix II to 2 CFR Part 200, contracts made under federal awards must include specific provisions, including those related to termination, lobbying, and Buy America certifications, where applicable. Condition: In its procurement files, the Authority’s had missing documentation of procurement history, absence of required contract clauses, lack of evidence of contractor responsibility determination and missing lobbying and Buy America certifications. Cause: The Authority did not have adequate internal controls in place to ensure compliance with federal procurement requirements, including documentation, contractor responsibility verification, and inclusion of required contract clauses and certifications. Effect: The absence of required documentation, verifications, and certifications opened the Authority to increased risk of noncompliance with federal procurement standards, potential ineligibility of costs, and exposure to audit disallowances or grant repayment. Questioned Costs: None identified. Context: For one out of ten transactions tested exceeding the micro-purchase threshold, the Authority failed to maintain a complete record of the procurement history and its determination on the status of the contractor responsibility and was missing required clauses and certifications in the contract details. Recommendation: We recommend that the Authority implement comprehensive internal control procedures over procurement to ensure compliance with federal requirements. This should include maintaining complete procurement documentation, verifying contractor responsibility through SAM.gov or equivalent, including all required federal clauses and certifications in solicitations and contracts, and providing adequate training to procurement staff on federal requirements and documentation standards. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Procurement and Suspension and Debarment Noncompliance and Significant Deficiency in Internal Control ALN 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: Per 2 CFR § 200.318(i), non-Federal entities must maintain records sufficient to detail the history of a 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, 2 CFR Part 180 requires that contracts be awarded only to responsible contractors. Verification of responsibility includes checking the System for Award Management (SAM.gov) or obtaining certifications. Under Appendix II to 2 CFR Part 200, contracts made under federal awards must include specific provisions, including those related to termination, lobbying, and Buy America certifications, where applicable. Condition: In its procurement files, the Authority’s had missing documentation of procurement history, absence of required contract clauses, lack of evidence of contractor responsibility determination and missing lobbying and Buy America certifications. Cause: The Authority did not have adequate internal controls in place to ensure compliance with federal procurement requirements, including documentation, contractor responsibility verification, and inclusion of required contract clauses and certifications. Effect: The absence of required documentation, verifications, and certifications opened the Authority to increased risk of noncompliance with federal procurement standards, potential ineligibility of costs, and exposure to audit disallowances or grant repayment. Questioned Costs: None identified. Context: For one out of ten transactions tested exceeding the micro-purchase threshold, the Authority failed to maintain a complete record of the procurement history and its determination on the status of the contractor responsibility and was missing required clauses and certifications in the contract details. Recommendation: We recommend that the Authority implement comprehensive internal control procedures over procurement to ensure compliance with federal requirements. This should include maintaining complete procurement documentation, verifying contractor responsibility through SAM.gov or equivalent, including all required federal clauses and certifications in solicitations and contracts, and providing adequate training to procurement staff on federal requirements and documentation standards. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Procurement and Suspension and Debarment Noncompliance and Significant Deficiency in Internal Control ALN 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: Per 2 CFR § 200.318(i), non-Federal entities must maintain records sufficient to detail the history of a 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, 2 CFR Part 180 requires that contracts be awarded only to responsible contractors. Verification of responsibility includes checking the System for Award Management (SAM.gov) or obtaining certifications. Under Appendix II to 2 CFR Part 200, contracts made under federal awards must include specific provisions, including those related to termination, lobbying, and Buy America certifications, where applicable. Condition: In its procurement files, the Authority’s had missing documentation of procurement history, absence of required contract clauses, lack of evidence of contractor responsibility determination and missing lobbying and Buy America certifications. Cause: The Authority did not have adequate internal controls in place to ensure compliance with federal procurement requirements, including documentation, contractor responsibility verification, and inclusion of required contract clauses and certifications. Effect: The absence of required documentation, verifications, and certifications opened the Authority to increased risk of noncompliance with federal procurement standards, potential ineligibility of costs, and exposure to audit disallowances or grant repayment. Questioned Costs: None identified. Context: For one out of ten transactions tested exceeding the micro-purchase threshold, the Authority failed to maintain a complete record of the procurement history and its determination on the status of the contractor responsibility and was missing required clauses and certifications in the contract details. Recommendation: We recommend that the Authority implement comprehensive internal control procedures over procurement to ensure compliance with federal requirements. This should include maintaining complete procurement documentation, verifying contractor responsibility through SAM.gov or equivalent, including all required federal clauses and certifications in solicitations and contracts, and providing adequate training to procurement staff on federal requirements and documentation standards. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Procurement and Suspension and Debarment Noncompliance and Significant Deficiency in Internal Control ALN 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: Per 2 CFR § 200.318(i), non-Federal entities must maintain records sufficient to detail the history of a 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, 2 CFR Part 180 requires that contracts be awarded only to responsible contractors. Verification of responsibility includes checking the System for Award Management (SAM.gov) or obtaining certifications. Under Appendix II to 2 CFR Part 200, contracts made under federal awards must include specific provisions, including those related to termination, lobbying, and Buy America certifications, where applicable. Condition: In its procurement files, the Authority’s had missing documentation of procurement history, absence of required contract clauses, lack of evidence of contractor responsibility determination and missing lobbying and Buy America certifications. Cause: The Authority did not have adequate internal controls in place to ensure compliance with federal procurement requirements, including documentation, contractor responsibility verification, and inclusion of required contract clauses and certifications. Effect: The absence of required documentation, verifications, and certifications opened the Authority to increased risk of noncompliance with federal procurement standards, potential ineligibility of costs, and exposure to audit disallowances or grant repayment. Questioned Costs: None identified. Context: For one out of ten transactions tested exceeding the micro-purchase threshold, the Authority failed to maintain a complete record of the procurement history and its determination on the status of the contractor responsibility and was missing required clauses and certifications in the contract details. Recommendation: We recommend that the Authority implement comprehensive internal control procedures over procurement to ensure compliance with federal requirements. This should include maintaining complete procurement documentation, verifying contractor responsibility through SAM.gov or equivalent, including all required federal clauses and certifications in solicitations and contracts, and providing adequate training to procurement staff on federal requirements and documentation standards. Views of Responsible Officials: See Corrective Action Plan
Federal Transit Cluster – Procurement and Suspension and Debarment Noncompliance and Significant Deficiency in Internal Control ALN 20.507 and 20.526 U.S. Department of Transportation – Federal Transit Administration Criteria: Per 2 CFR § 200.318(i), non-Federal entities must maintain records sufficient to detail the history of a 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, 2 CFR Part 180 requires that contracts be awarded only to responsible contractors. Verification of responsibility includes checking the System for Award Management (SAM.gov) or obtaining certifications. Under Appendix II to 2 CFR Part 200, contracts made under federal awards must include specific provisions, including those related to termination, lobbying, and Buy America certifications, where applicable. Condition: In its procurement files, the Authority’s had missing documentation of procurement history, absence of required contract clauses, lack of evidence of contractor responsibility determination and missing lobbying and Buy America certifications. Cause: The Authority did not have adequate internal controls in place to ensure compliance with federal procurement requirements, including documentation, contractor responsibility verification, and inclusion of required contract clauses and certifications. Effect: The absence of required documentation, verifications, and certifications opened the Authority to increased risk of noncompliance with federal procurement standards, potential ineligibility of costs, and exposure to audit disallowances or grant repayment. Questioned Costs: None identified. Context: For one out of ten transactions tested exceeding the micro-purchase threshold, the Authority failed to maintain a complete record of the procurement history and its determination on the status of the contractor responsibility and was missing required clauses and certifications in the contract details. Recommendation: We recommend that the Authority implement comprehensive internal control procedures over procurement to ensure compliance with federal requirements. This should include maintaining complete procurement documentation, verifying contractor responsibility through SAM.gov or equivalent, including all required federal clauses and certifications in solicitations and contracts, and providing adequate training to procurement staff on federal requirements and documentation standards. Views of Responsible Officials: See Corrective Action Plan
2024-003 – Written Policies Required by the Uniform Grant Guidance Finding Type. Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance (Procurement and Suspension and Debarment) Program. COVID-19 State and Local Fiscal Recovery Funds Cluster (CFDA# 21.027); U.S. Department of Treasury; Passed through Lake County. Criteria. Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition. The District did not have documented procurement standards to comply with 2 CFR sections 200.318 through 200.326. Cause. The District has drafted a policy for these areas in accordance with 2 CFR Part 200, but it has not been finalized. Effect. As a result of this condition, the District did not fully comply with 2 CFR Part 200 applicable to the above noted grant. Questioned Costs. No costs have been questioned as a result of this finding. Recommendation. We recommend that the District develop a policy as soon as practical, but no later than the end of fiscal year 2025, to comply with 2 CFR sections 200.318 through 200.326. View of Responsible Officials. We agree with the recommendation and will develop procedures to comply with the Uniform Guidance applicable to grants Repeat finding. 2023-003
Prior Year Finding: 2023-004 Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2023 6/30/2024) Compliance Requirement: Procurement Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Per 2 CFR section 200.318, a 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. Per 2 CFR section 200.319, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and § 200.320. Per the Towns purchasing policy, goods or services costing $10,000 or more must be purchased from the lowest responsive bidder meeting specifications after advertising for bids. Condition/Context: The Town failed to provide documentation supporting compliance with required procurement processes for goods or services exceeding $10,000 for five out of five vendors tested. This includes a lack of evidence on how these vendors were selected and whether the procurement process ensured full and open competition. Questioned Costs: Unknown. Cause: The Town's internal controls were not sufficient to ensure that procurement policies were followed for purchases made for the program. Effect: Failure to adhere to procurement policies and procedures may result in obtaining goods or services under terms that are not in the best interest of the federal program. Recommendation: We recommend that the Town enhance its procedures and internal controls to ensure that it verifies vendors are not suspended or debarred from business prior to all goods and services charged to the program. The Town should retain documentation of procurement suspension/debarment status verifications for its vendors audit purposes. Views of Responsible Officials: Management agrees with the finding.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.
Criteria: The Code of Federal Regulations §200.318 required that entities must have and use documented procurement procedures that conform to the procurement standards identified in §200.317 through §200.327. These procedures must include written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180 300). The Code of Federal Regulations (2 CFR 200.318(I)) requires that each non-Federal entity must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: The Organization does not have written procurement policies in accordance with procurement requirements contained within the Uniform Guidance including policies and procedures in place to ensure that before entering into a covered transaction the Organization perform the necessary verifications of suspended or debarred entities. The Organization did not maintain sufficient documentation of its procurement decisions and maintain sufficient documentation of its procurement decisions. Cause: The Organization's federal funding significantly increased in the year ended June 30, 2024 and is the first year that the Organization was required to undergo an audit in accordance with the Uniform Guidance that included a procurement requirement. The Organization has existing purchasing and conflict of interest policies in place; however, it was not aware that its existing purchasing policies were required to be updated to explicitly comply with the standards in the Uniform Guidance. As well as, the Organization does not have procedures in place to ensure suspension and debarment checks are completed prior to entering into purchase or service agreements with vendors and updated on an annual basis. Evidence of actions taken to ensure proper suspension and debarment requirements were not being maintained by the Organization. Effect: In the absence of an appropriately written policy, it is more likely that the Organization's procurement practices will not comply with the Uniform Guidance. The Organization did not comply with the procurement standards concerning suspension and debarment and documentation of procurement activities. Recommendation: A written procurement policy in compliance with federal guidelines and a written standard of conduct should be established in accordance with procurement requirements contained in the Uniform Guidance. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.