Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
Assistance Listing Numbers: 10.001, 10.200, 10.215, 10.307, 10.310, 10.311, and 10.912 Name of Federal Program or Cluster: Research and Development Cluster Name of Federal Agency: Department of Agriculture Federal Award Identification Numbers: 58-5090-2-037 2022-38624-38368 2021-38640-34714 2020-38640-31522 2022-38640-37486 2023-51300-40959 2021-68012-35917 2019-68012-29852 2020-68012-31934 2021-49400-35592 NR225F48XXXXG006 Name of Pass-through Entities and Award Periods: Michigan State University-September 1, 2022 through August 31, 2025; Regents of the University of Minnesota- April 1, 2021 through March 31, 2023, March 1, 2022 through February 28, 2025, and April 1, 2023 through March 31, 2025; Board of Regents of the University of Wisconsin System- September 1, 2019 through August 31, 2024, September 1, 2020 through August 31, 2025, and January 1, 2022 through December 31, 2026 Criteria or Specific Requirement: 2 CFR section 200.318(a) requires a non-federal entity to have and use documented procurement procedures, consistent with state, local, and tribal laws and regulations and the standards of 2 CFR sections 200.317 through 200.327. 2 CFR section 200.318(c)(1) requires a non- federal entity to maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. 2 CFR section 200.318(i) requires a non-federal entity to maintain records sufficient to detail the history of procurement including, but not limited to, the: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: There are no documented procurement procedures that meet the requirements of 2 CFR sections 200.317 through 200.327 that were implemented for the fiscal year. There are no consistently implemented internal controls documented to ensure compliance with 2 CFR sections 200.317 through 200.327. 19 out of 60 procurements did not have documented an internal control over compliance. 1 of 2 simplified acquisition procurements had no documentation of the rationale for the method, documentation to support a required procurement method used, contractor selections or rejections, suspension and debarment, and bases for contract prices. The only support documented are the invoices. No covered transactions were documented as tested for suspension and debarment. Cause: There were no written procedures over procurement and when changes in management and accounting services occurred internal control documentation was not consistent and compliance requirements were not understood. Effect or Potential Effect: Procurement transactions may not be in compliance and disallowed. Questioned Costs: $22,000 – two simplified acquisitions Context: 60 ($76,181) out of 721 ($302,069) procurement transactions were tested. Two of the 721 procurements were simplified acquisitions while the remaining were micro purchases. Repeat Finding: This is a repeat of Finding 2022-005. Recommendation: The Organization should develop and document procurement procedures that meet state, local, and Uniform Guidance requirements. Internal controls should be designed, implemented, and documented within the procurement procedures to ensure compliance with 2 CFR sections 200.317 through 200.327. At a minimum, the procurement history including rationale for the method, procurement method support, contract selections and rejections, suspension and debarment, and bases for contract prices should be documented. Views of Responsible Officials: Management agrees with the finding and will implement procurement procedures.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Wahkiakum County January 1, 2023 through December 31, 2023 2023-002 The County did not have adequate controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 20.205, Highway Planning and Construction Federal Grantor Name: Federal Highway Administration, U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: 2035-056 LA-10360-7F and 8F / LA-10355 TAP-D350(001) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2023, the County spent $175,301 in Highway Planning and Construction program funds. The program’s objective is to provide funds for the planning, design, construction and rehabilitation of highways and bridge transportation systems. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations also require recipients to establish and follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. The procedures must reflect the most restrictive of applicable federal, state or local procurement thresholds and methods when using federal funds to procure goods and services. Governments must apply the more restrictive requirements by obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Our audit found the County’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the County did not establish its own written procurement procedures and did not maintain records sufficient to detail the procurement of a professional services contract that it charged to the program. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Management and staff were unaware the County was required to have its own written procurement procedures and maintain records detailing its procurement actions. Effect of Condition The County did not establish its own written procurement procedures required by federal procurement requirements. Without written policies and procedures, the County is at greater risk of noncompliance with the most restrictive of federal, state or local procurement methods and requirements when using federal funds to procure contractors. Additionally, the County procured a professional services contract with costs of $151,761 that it charged to the program during the period. County staff were able to describe the competitive proposals process that they used. However, the County did not retain the proposals it received or documentation of the evaluation and scoring of proposals to support that it awarded the contract to the contractor with the most advantageous proposal. Without maintaining sufficient records to detail the history of procurement, the County cannot demonstrate compliance with federal procurement requirements. Recommendation We recommend the County establish written procurement procedures that conform to federal procurement requirements. We also recommend the County strengthen internal controls to ensure it maintains documentation to demonstrate compliance with federal procurement requirements. County’s Response The Process Checklist has been completed and is in the Prosecuting Attorney’s office for review. We have written into the Process Checklist to maintain the documentation required when obtaining Professional Bids. Auditor’s Remarks We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to resolve this finding. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Section 318, General procurement standards, establishes requirements for written procedures and requirements for maintaining records sufficient to detail the history of procurement. Title 2 CFR 200, Uniform Guidance, section 319, Competition, establishes all procurement transactions are to be conducted in a manner providing full and open competition. Title 2 CFR 200, Uniform Guidance, section 320, Methods of procurement to be followed, describes each allowable procurement method.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Wahkiakum County January 1, 2023 through December 31, 2023 2023-002 The County did not have adequate controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 20.205, Highway Planning and Construction Federal Grantor Name: Federal Highway Administration, U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: 2035-056 LA-10360-7F and 8F / LA-10355 TAP-D350(001) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2023, the County spent $175,301 in Highway Planning and Construction program funds. The program’s objective is to provide funds for the planning, design, construction and rehabilitation of highways and bridge transportation systems. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations also require recipients to establish and follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. The procedures must reflect the most restrictive of applicable federal, state or local procurement thresholds and methods when using federal funds to procure goods and services. Governments must apply the more restrictive requirements by obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Our audit found the County’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the County did not establish its own written procurement procedures and did not maintain records sufficient to detail the procurement of a professional services contract that it charged to the program. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition Management and staff were unaware the County was required to have its own written procurement procedures and maintain records detailing its procurement actions. Effect of Condition The County did not establish its own written procurement procedures required by federal procurement requirements. Without written policies and procedures, the County is at greater risk of noncompliance with the most restrictive of federal, state or local procurement methods and requirements when using federal funds to procure contractors. Additionally, the County procured a professional services contract with costs of $151,761 that it charged to the program during the period. County staff were able to describe the competitive proposals process that they used. However, the County did not retain the proposals it received or documentation of the evaluation and scoring of proposals to support that it awarded the contract to the contractor with the most advantageous proposal. Without maintaining sufficient records to detail the history of procurement, the County cannot demonstrate compliance with federal procurement requirements. Recommendation We recommend the County establish written procurement procedures that conform to federal procurement requirements. We also recommend the County strengthen internal controls to ensure it maintains documentation to demonstrate compliance with federal procurement requirements. County’s Response The Process Checklist has been completed and is in the Prosecuting Attorney’s office for review. We have written into the Process Checklist to maintain the documentation required when obtaining Professional Bids. Auditor’s Remarks We thank the County for its cooperation and assistance during the audit and acknowledge its commitment to resolve this finding. We will review the corrective action taken during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Section 318, General procurement standards, establishes requirements for written procedures and requirements for maintaining records sufficient to detail the history of procurement. Title 2 CFR 200, Uniform Guidance, section 319, Competition, establishes all procurement transactions are to be conducted in a manner providing full and open competition. Title 2 CFR 200, Uniform Guidance, section 320, Methods of procurement to be followed, describes each allowable procurement method.
NATIONAL SCIENCE FOUNDATION Program Information Assistance Listing # 47.076 STEM Education Grant No. (FAIN) 2005484 Grant Period - September 1, 2020 – August 31, 2023 Grant No. (FAIN) 2005942 Grant Period – August 15, 2020 – July 31, 2024 2023-002 Policies and Procedures Material Weakness Criteria: The Code of Federal Regulations (CFR) Section 200.318 - 200.327 require written policies concerning methods of procurement for goods and services. Condition: The Foundation did not have a written procurement policy that included all of the required elements during 2023. Also, there were no controls in place to detect or prevent this policy from not being prepared. Cause: This is the first year that the Foundation was required to have a Single audit and as such is still in the process of developing and adopting specific policies and procedures to ensure its internal practices are in alignment with the Uniform Guidance. Effect: The Foundation is not in compliance with Section 200.318 - 200.327 of the Code of Federal Regulations. Auditor’s Recommendation: We recommend that the Foundation adopt a formal written procurement policy in the format and with the elements required by 2 CFR Sections 200.318 to 200.327. Views of Responsible Officials and Planned Corrective Actions: The Foundation’s management team agrees with this finding and remains fully committed to both developing and adopting specific procurement policies for federal expenditures which will better ensure its internal practices are in alignment with the Uniform Guidance.
ALN Title and Number COVID-19 Coronavirus State and Local Fiscal Recovery Funds, AL #21.027 Federal Award Number and Year 2023 Federal Agency United States Department of the Treasury Pass-Through Entity Ohio Department of Public Safety Repeat Finding from Prior Audit? No Finding Number (if repeat) N/A Finding 2023-004 – Material Weakness/Noncompliance – Allowable Costs/Cost Principals and Suspension and Debarment 2 CFR 200 outlines the following policies required for a County spending Coronavirus State and Local Fiscal Recovery Funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; • 2 CFR 200.430 for allowability of compensation costs; 2 CFR 200.464(a)(2) for reimbursement of relocation costs; • 2 CFR 200.318(c)(1) for employee conflicts of interest; • 2 CFR 200.318(c)(2) for organizational conflicts of interest; • 2 CFR 200.320(b)(2) for selection and awarding of contracts for competitive proposals; • 2 CFR 200.319(d) for minimum evaluation criteria for bids and proposals. During testing we noted that the County did not have sufficient written policies addressing the above requirements. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.
ALN Title and Number COVID-19 Coronavirus State and Local Fiscal Recovery Funds, AL #21.027 Federal Award Number and Year 2023 Federal Agency United States Department of the Treasury Pass-Through Entity Ohio Department of Public Safety Repeat Finding from Prior Audit? No Finding Number (if repeat) N/A Finding 2023-004 – Material Weakness/Noncompliance – Allowable Costs/Cost Principals and Suspension and Debarment 2 CFR 200 outlines the following policies required for a County spending Coronavirus State and Local Fiscal Recovery Funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; • 2 CFR 200.430 for allowability of compensation costs; 2 CFR 200.464(a)(2) for reimbursement of relocation costs; • 2 CFR 200.318(c)(1) for employee conflicts of interest; • 2 CFR 200.318(c)(2) for organizational conflicts of interest; • 2 CFR 200.320(b)(2) for selection and awarding of contracts for competitive proposals; • 2 CFR 200.319(d) for minimum evaluation criteria for bids and proposals. During testing we noted that the County did not have sufficient written policies addressing the above requirements. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.
ALN Title and Number COVID-19 Coronavirus State and Local Fiscal Recovery Funds, AL #21.027 Federal Award Number and Year 2023 Federal Agency United States Department of the Treasury Pass-Through Entity Ohio Department of Public Safety Repeat Finding from Prior Audit? No Finding Number (if repeat) N/A Finding 2023-004 – Material Weakness/Noncompliance – Allowable Costs/Cost Principals and Suspension and Debarment 2 CFR 200 outlines the following policies required for a County spending Coronavirus State and Local Fiscal Recovery Funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; • 2 CFR 200.430 for allowability of compensation costs; 2 CFR 200.464(a)(2) for reimbursement of relocation costs; • 2 CFR 200.318(c)(1) for employee conflicts of interest; • 2 CFR 200.318(c)(2) for organizational conflicts of interest; • 2 CFR 200.320(b)(2) for selection and awarding of contracts for competitive proposals; • 2 CFR 200.319(d) for minimum evaluation criteria for bids and proposals. During testing we noted that the County did not have sufficient written policies addressing the above requirements. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.
ALN Title and Number COVID-19 Coronavirus State and Local Fiscal Recovery Funds, AL #21.027 Federal Award Number and Year 2023 Federal Agency United States Department of the Treasury Pass-Through Entity Ohio Department of Public Safety Repeat Finding from Prior Audit? No Finding Number (if repeat) N/A Finding 2023-004 – Material Weakness/Noncompliance – Allowable Costs/Cost Principals and Suspension and Debarment 2 CFR 200 outlines the following policies required for a County spending Coronavirus State and Local Fiscal Recovery Funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; • 2 CFR 200.430 for allowability of compensation costs; 2 CFR 200.464(a)(2) for reimbursement of relocation costs; • 2 CFR 200.318(c)(1) for employee conflicts of interest; • 2 CFR 200.318(c)(2) for organizational conflicts of interest; • 2 CFR 200.320(b)(2) for selection and awarding of contracts for competitive proposals; • 2 CFR 200.319(d) for minimum evaluation criteria for bids and proposals. During testing we noted that the County did not have sufficient written policies addressing the above requirements. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.
Finding 2023-002 Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: Department of Health and Human Services (HHS) Pass-Through: State of Washington Department of Health (DOH) Program Title: HIV Prevention Activities Health Department Assistance Listing Number: 93.940 Award Number: CBO27200; CBO28119; 10248 PREV Award Period: July 01, 2022 through August 31, 2023; July 01, 2023 through December 31, 2023; April 01, 2023 through March 31, 2024 Criteria Internal controls requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance), Subpart D ‐ Post Federal Award Requirements, Sections 200.318 through 200.320, require that a non-federal entity have documented procurement procedures that provide for full and open competition and follow the procurement methods required by Subpart D of 2 CFR Part 200. Condition/Context for Evaluation Although the Organization has a procurement policy, the policy does not cover the requirements in Subpart D which include the thresholds for micro-purchase awards, small purchases, and formal procurement methods such as sealed bids, proposals, and noncompetitive procurement. Nor does the policy cover solicitation procedures for procurements. Cause The Organization's procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Effect or Potential Effect The absence of a policy that fully conforms to the Uniform Guidance does not assure open and free competition among suppliers. Questioned Costs None. Repeat Finding No. Recommendation We recommend the Organization implement measures to ensure that its procurement policy reflect applicable requirements in 2 CFR Part 200 Subpart D. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Finding 2023-002 Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: Department of Health and Human Services (HHS) Pass-Through: State of Washington Department of Health (DOH) Program Title: HIV Prevention Activities Health Department Assistance Listing Number: 93.940 Award Number: CBO27200; CBO28119; 10248 PREV Award Period: July 01, 2022 through August 31, 2023; July 01, 2023 through December 31, 2023; April 01, 2023 through March 31, 2024 Criteria Internal controls requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance), Subpart D ‐ Post Federal Award Requirements, Sections 200.318 through 200.320, require that a non-federal entity have documented procurement procedures that provide for full and open competition and follow the procurement methods required by Subpart D of 2 CFR Part 200. Condition/Context for Evaluation Although the Organization has a procurement policy, the policy does not cover the requirements in Subpart D which include the thresholds for micro-purchase awards, small purchases, and formal procurement methods such as sealed bids, proposals, and noncompetitive procurement. Nor does the policy cover solicitation procedures for procurements. Cause The Organization's procurement policy does not seem to have been reviewed against the Uniform Guidance for compliance. Effect or Potential Effect The absence of a policy that fully conforms to the Uniform Guidance does not assure open and free competition among suppliers. Questioned Costs None. Repeat Finding No. Recommendation We recommend the Organization implement measures to ensure that its procurement policy reflect applicable requirements in 2 CFR Part 200 Subpart D. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
U.S. Department of Treasury COVID 19 - Coronavirus State and Local Fiscal Recovery Funds - 21.027 Criteria or Specific Requirement: Procurement and Significant Deficiency In accordance with 2 CFR 200.318, recipients and subrecipients must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including acquisition of property and services. These documented procurement procedures must be consistent with State, local and tribal laws and regulations and the standards identified in 2 CFR 200.317 through 2 CFR 200.327. Condition: During our test work over the Coronavirus State and Local Fiscal Recovery grant, we noted the Unified Government did not perform procurement procedures on one of its vendor contracts. Questioned Costs - None noted. Context: For 21.027, there were 29 vendors receiving a total of $1,789,214 subject to procurement requirements. Of those 29, a sample of eight vendors receiving a total of $470,106 were selected for testing. One of the eight vendors selected for testing did not undergo the Unified Government's formal procurement procedures. However, the vendor did undergo proper suspension and debarment checks and no issues were identified during this check. The sample was not intended to be, and was not, a statistically valid sample. Identification of Prior Year Finding: N/A Effect: Federal funds could be paid to entities outside of the Unified Government's procurement policy. Cause: The vendor identified was granted a non-competitive procurement under national emergency conditions due to the effects of COVID-19. However, the vendor was utilized again after the national emergency period and the Unified Government's procurement policy should have been followed at this time, but was not. Recommendation: We recommend that the Unified Government communicate to all departments that purchases using federal funds follow the procurement policy procedures prior to purchase and the procurement department provide training on the requirements to properly document that the procedures are completed. View of Responsible Official and Planned Corrective Actions: Departments have been informed of the procurement requirements and the procurement policy will be adhered to on a go forward basis.
2023-004 Procurement, Suspension, and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLFRP1274, 2021 Pass-Through Agency: N/A – Federal Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the County 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. Additionally, the County must follow further federal guidance over full and open competition as provided in Title 2 U.S. Code of Federal Regulations § 200.319, and perform a cost or price analysis as provided in Title 2 U.S. Code of Federal Regulations § 200.324. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: For two procurements tested above the micro-purchase threshold, documentation of the history of the procurement, providing full and open competition, and a cost or price analysis was not available. For the one covered transaction tested, the verification for suspended or debarred vendors was not performed before entering into the covered transaction. Questioned Costs: None. Context: Two of five contracts were tested for compliance with applicable federal regulations. Additionally, one covered transaction was subject to suspension and debarment. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: It cannot be determined that the contracting process was open and fair because the County did not document the rationale for the contractor selection. It also cannot be determined that an entity was not suspended, debarred, or otherwise excluded from conducting business with the County. Cause: The County did not maintain the necessary documentation to allow the auditor to test for procurement and suspension and debarment. Recommendation: We recommend the County maintain documentation on the history of a procurement, provide for full and open competition, and perform a cost or price analysis to support compliance with Title 2 U.S. Code of Federal Regulations §§ 200.318, 200.319, and 200.324. We further recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the County; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur
Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.
Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.
Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.
Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.
Finding 2023-002: Procurement US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the Axon contract totaling $651,922 for the year ended December 31, 2023 followed formal procurement procedures. The Axon contract exceeds the Uniform Guidance formal procurement threshold but was done through cooperative purchasing. In addition, in accordance with the Uniform Guidance, a purchase price from a cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the value of the procurement transaction. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. The City relied upon vendors preapproved by the Commonwealth of Pennsylvania’s General Services Administration (GSA). These vendors were considered preapproved based on the Commonwealth’s own use of cooperative purchasing programs. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat finding: No Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows all Uniform Guidance procurement standards, especially regarding cooperating purchasing programs. View of Responsible Officials: Management agrees. See Corrective Action Plan.
Federal Agency: U.S. Department of Transportation Federal Program Title: Formula Grants for Rural Area and Tribal Transit Program AL Number: 20.509 Federal Award Identification Number and Year: MN-2021-036-01 Pass-Through Agency: Minnesota Department of Transportation Pass-Through Number(s): 1051353 Award Period: 1/1/2023-12/31/2023 Type of Finding: • Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: 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. Non-federal entities should also follow any state procurement requirements as well. Condition: During our testing we noted the Organization did not apply any procurement procedures for five small purchases and one competitive proposal as they did not perform nor retain adequate documentation in accordance with Uniform Guidance and state requirements. Questioned costs: Unknown Context: Six out of the six procurement selections did not have any procurement procedures followed for a total of $722,948. Cause: Vendors in place had been procured in prior years, before current management assumed operations. Current management was unable to verify if the policies were followed. Effect: Potential effect of noncompliance with Uniform Guidance when procuring goods and services for expenditures over federal awards. Repeat finding: This is not a repeat finding. Recommendation: The Organization should review 2 CFR sections 200.318 through 200.326 requirements for procurement. The Organization should ensure documents are retained to support whether procurement policies were followed for vendors procured in years past. Views of responsible officials and planned corrective actions: There are no disagreements with the audit finding. The Organization will review the procurement standards as well as ensure documents are retained to support whether procurement policies were followed.
Criteria: The Uniform Guidance requires that District have written procurement policies in place that comply with 2 CFR Sections 200.318 – 300.327 when Procurement is applicable to a federal program. According to the compliance requirements matrix, Procurement is applicable to ALN #10.760. Condition: While testing the Procurement compliance requirement, we found that management had not adopted the required policies contained in 2 CFR Sections 200.318 – 300.327. We did not however find any evidence of material non compliance related to this requirement. Cause: Management has outsourced the procurement process to an engineering firm. While the firm has knowledge and experience regarding Uniform Guidance procurement, they do not develop policies for their clients. Effect: Internal controls surrounding Uniform Guidance are incomplete. Recommendation: Management should review 2 CFR Sections 200.138 – 300.327 and develop written policies that comply with the compliance requirements. Questioned Costs: None Management’s Response: Management will review their current procurement policies and make any necessary changes to update the policies to be compliant with 2 CFR Sections 200.138 – 300.327.
Criteria: The Uniform Guidance requires that District have written procurement policies in place that comply with 2 CFR Sections 200.318 – 300.327 when Procurement is applicable to a federal program. According to the compliance requirements matrix, Procurement is applicable to ALN #10.760. Condition: While testing the Procurement compliance requirement, we found that management had not adopted the required policies contained in 2 CFR Sections 200.318 – 300.327. We did not however find any evidence of material non compliance related to this requirement. Cause: Management has outsourced the procurement process to an engineering firm. While the firm has knowledge and experience regarding Uniform Guidance procurement, they do not develop policies for their clients. Effect: Internal controls surrounding Uniform Guidance are incomplete. Recommendation: Management should review 2 CFR Sections 200.138 – 300.327 and develop written policies that comply with the compliance requirements. Questioned Costs: None Management’s Response: Management will review their current procurement policies and make any necessary changes to update the policies to be compliant with 2 CFR Sections 200.138 – 300.327.
Finding 2023-005 – Procurement Repeat Finding – See Finding 2022-007 US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the water main replacement project totaling $3,104,970 for the year ended December 31, 2023 followed formal procurement procedures. The water main replacement contract exceeds the Uniform Guidance formal procurement methods. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat Finding: Yes Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. View of Responsible Official: The City agrees. See the corrective action plan.
Finding 2023-005 – Procurement Repeat Finding – See Finding 2022-007 US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the water main replacement project totaling $3,104,970 for the year ended December 31, 2023 followed formal procurement procedures. The water main replacement contract exceeds the Uniform Guidance formal procurement methods. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat Finding: Yes Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. View of Responsible Official: The City agrees. See the corrective action plan.
Finding 2023-005 – Procurement Repeat Finding – See Finding 2022-007 US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the water main replacement project totaling $3,104,970 for the year ended December 31, 2023 followed formal procurement procedures. The water main replacement contract exceeds the Uniform Guidance formal procurement methods. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat Finding: Yes Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. View of Responsible Official: The City agrees. See the corrective action plan.
Finding 2023-005 – Procurement Repeat Finding – See Finding 2022-007 US Department of the Treasury – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (ARPA) (ALN 21.027) Condition: The City could not provide evidence that the water main replacement project totaling $3,104,970 for the year ended December 31, 2023 followed formal procurement procedures. The water main replacement contract exceeds the Uniform Guidance formal procurement methods. In addition, in accordance with the Uniform Guidance, a purchase price from the Commonwealth of Pennsylvania COSTARS cooperative purchasing program is considered to be only one competitive price proposal and it cannot replace a full procurement process. Criteria: In accordance with Uniform Guidance procurement requirements found in 2 CFR Part 200.318 through 200.327, the City is required to ensure that procurement methods used for purchases are appropriate based on the dollar amount of the purchase. Cause: Procedures in place to ensure that the proper procurement process is followed were not adequate. Effect: The City was not in compliance with the procurement requirements of the Uniform Guidance. Repeat Finding: Yes Questioned costs: Unknown Recommendation: We recommend that the City establish procedures to ensure that their purchasing policy follows Uniform Guidance procurement standards. View of Responsible Official: The City agrees. See the corrective action plan.
Procurement – Suspension and Debarment Information on Federal Program: U.S. Department of Health COVID-19 Detection and Mitigation of COVID-19 in Confinement Facilities, federal assistance listing number 93.323. Criteria: 2 CFR Sections 200.212, 200.318(h), and 180.300 and 48 CFR Section 52.209-6 state that a non-Federal entity must review that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded from participation in federal award programs. Statement of Condition: During our testing for procurement compliance, it was determined that the New York State Sheriffs’ Association, Inc. did not verify that vendors charged to the major program are not debarred, suspended, or otherwise excluded from participation in federal award programs. Questioned Cost: None Statement of Cause: Management was not aware of the requirement to review an entity’s status. Statement of Effect: The New York State Sheriffs’ Association, Inc. is not in compliance with 2 CFR Sections 200.212, 200.318(h), and 180.300 and 48 CFR Section 52.209-6. As a result, the Association could enter into covered transactions with entities that are debarred, suspended, or otherwise excluded from participation in federal award programs. Repeat Finding: Yes Perspective Information: There was one vendor in excess of the $25,000 threshold which was reviewed to determine eligibility for participation noting they are not debarred, suspended, or otherwise excluded from participation in federal award programs. Recommendation: We recommend management review and document the verification that vendors are not debarred, suspended, or otherwise excluded from participation in federal award programs. Views of the Responsible Officials and Planned Corrective Actions: Vendors will be reviewed and documented that they are not debarred, suspended, or otherwise excluded from participation in federal award programs by use of the System for Award Management (SAM), the Official U.S. Government system. Based on the timeline of the 2022 audit, many of the corrective actions were made in late Oct/November 2023.
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: SLFRP0002 – 2021, SLFRP1045 – 2021, SLFRP0194 - 2021 Pass-Through Agency: Washington State Department of Commerce, City of Seattle, Snohomish County Pass-Through Number(s): (DOC) 23-F21400119-017, DC222308, CLFR-042 Award Period: Various Type of Finding: • Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: For grants and cooperative agreements, the procurement method used must be appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320 or the entities policies, whichever is more restrictive. Condition: Procurement procedures were not followed in accordance with the Agency’s policy. Questioned costs: None Context: Eight vendors that were identified as requiring procurement procedures during testing did not have formal documentation of obtaining bids, the reason for final decision and justification for sole source. Cause: The Agency did not follow its procurement policy. Effect: The Agency is out of compliance with its procurement policy. Repeat finding: No Recommendation: We recommend the Agency's procurement policy is updated to reflect the current federal guidelines and that policies and procedures are implemented to ensure that the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price is documented as applicable (2 CFR section 200.318(i) and 48 CFR Part 44 and section 52.244-2). Views of responsible officials: There is no disagreement with the audit finding.
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: SLFRP0002 – 2021, SLFRP1045 – 2021, SLFRP0194 - 2021 Pass-Through Agency: Washington State Department of Commerce, City of Seattle, Snohomish County Pass-Through Number(s): (DOC) 23-F21400119-017, DC222308, CLFR-042 Award Period: Various Type of Finding: • Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: For grants and cooperative agreements, the procurement method used must be appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320 or the entities policies, whichever is more restrictive. Condition: Procurement procedures were not followed in accordance with the Agency’s policy. Questioned costs: None Context: Eight vendors that were identified as requiring procurement procedures during testing did not have formal documentation of obtaining bids, the reason for final decision and justification for sole source. Cause: The Agency did not follow its procurement policy. Effect: The Agency is out of compliance with its procurement policy. Repeat finding: No Recommendation: We recommend the Agency's procurement policy is updated to reflect the current federal guidelines and that policies and procedures are implemented to ensure that the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price is documented as applicable (2 CFR section 200.318(i) and 48 CFR Part 44 and section 52.244-2). Views of responsible officials: There is no disagreement with the audit finding.
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: SLFRP0002 – 2021, SLFRP1045 – 2021, SLFRP0194 - 2021 Pass-Through Agency: Washington State Department of Commerce, City of Seattle, Snohomish County Pass-Through Number(s): (DOC) 23-F21400119-017, DC222308, CLFR-042 Award Period: Various Type of Finding: • Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: For grants and cooperative agreements, the procurement method used must be appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320 or the entities policies, whichever is more restrictive. Condition: Procurement procedures were not followed in accordance with the Agency’s policy. Questioned costs: None Context: Eight vendors that were identified as requiring procurement procedures during testing did not have formal documentation of obtaining bids, the reason for final decision and justification for sole source. Cause: The Agency did not follow its procurement policy. Effect: The Agency is out of compliance with its procurement policy. Repeat finding: No Recommendation: We recommend the Agency's procurement policy is updated to reflect the current federal guidelines and that policies and procedures are implemented to ensure that the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price is documented as applicable (2 CFR section 200.318(i) and 48 CFR Part 44 and section 52.244-2). Views of responsible officials: There is no disagreement with the audit finding.
U.S. Department of Treasury passed through State of Utah Department of Workforce Services and through Colorado Department of Human Services 2023-002 Procurement and Suspension and Debarment Program Name of Federal Program (Assistance Listing Number): Coronavirus State and Local Fiscal Recovery Funds (21.027) Criteria - Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients “must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price” 2 CFR section 200.318(i). Context and Condition - We selected five contracts to test for compliance with procurement standards. Records for one contract lacked documentation sufficient to detail procurement history. Cause - The Academy did not follow its procurement policy for publicly soliciting bids. Effect - A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs - No costs were questioned. Recommendation - We recommend the Academy ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials - The Academy will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
Finding 2023-003: Procurement (Material Weakness) Federal Programs: All Federal programs Criteria: Under 2 CFR 200.318, the Uniform Guidance requires that a recipient of U.S Government funds must use their own documented procurement procedures which reflect the applicable Uniform Guidance requirements to procure goods and services in order to ensure that all purchases are conducted in a manner that provides full and open competition. Condition: During our testing over procurement, we determined that ICMEC did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Cause: ICMEC did not follow their established, internal procurement policy and that policy did not follow the requirements of the Uniform Guidance for procurement. Effect: Purchases of goods and services could be made above prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that ICMEC will not receive the best value for its purchases. The procurement process also allows for the evaluation of potential conflicts of interest with prospective vendors and contractors. Failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: None noted. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from ICMEC's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that ICMEC revise their procurement policy to be align with required Uniform Guidance standards. This policy should be communicated to all employees and enforced during the upcoming year. All procurement records for purchases in excess of the threshold should include the following at a minimum: (a) basis for the contractor/goods selected or (b) justification for lack of competition when quotes or competitive bids are not obtained. Additionally, the conclusion should be clearly documented and accompany the procurement documentation. We also believe that all long-standing contractual engagements should evidence occasional re-evaluation to ensure such relationships are free of conflicts.
Finding 2023-003: Procurement (Material Weakness) Federal Programs: All Federal programs Criteria: Under 2 CFR 200.318, the Uniform Guidance requires that a recipient of U.S Government funds must use their own documented procurement procedures which reflect the applicable Uniform Guidance requirements to procure goods and services in order to ensure that all purchases are conducted in a manner that provides full and open competition. Condition: During our testing over procurement, we determined that ICMEC did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Cause: ICMEC did not follow their established, internal procurement policy and that policy did not follow the requirements of the Uniform Guidance for procurement. Effect: Purchases of goods and services could be made above prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that ICMEC will not receive the best value for its purchases. The procurement process also allows for the evaluation of potential conflicts of interest with prospective vendors and contractors. Failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: None noted. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from ICMEC's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that ICMEC revise their procurement policy to be align with required Uniform Guidance standards. This policy should be communicated to all employees and enforced during the upcoming year. All procurement records for purchases in excess of the threshold should include the following at a minimum: (a) basis for the contractor/goods selected or (b) justification for lack of competition when quotes or competitive bids are not obtained. Additionally, the conclusion should be clearly documented and accompany the procurement documentation. We also believe that all long-standing contractual engagements should evidence occasional re-evaluation to ensure such relationships are free of conflicts.
Finding 2023-003: Procurement (Material Weakness) Federal Programs: All Federal programs Criteria: Under 2 CFR 200.318, the Uniform Guidance requires that a recipient of U.S Government funds must use their own documented procurement procedures which reflect the applicable Uniform Guidance requirements to procure goods and services in order to ensure that all purchases are conducted in a manner that provides full and open competition. Condition: During our testing over procurement, we determined that ICMEC did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Cause: ICMEC did not follow their established, internal procurement policy and that policy did not follow the requirements of the Uniform Guidance for procurement. Effect: Purchases of goods and services could be made above prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that ICMEC will not receive the best value for its purchases. The procurement process also allows for the evaluation of potential conflicts of interest with prospective vendors and contractors. Failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: None noted. Context: Our audit procedures consisted of testwork completed on individual expenditures charged to the Federal awards. The report in which samples were selected was generated directly from ICMEC's general ledger (accounting system). We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that ICMEC revise their procurement policy to be align with required Uniform Guidance standards. This policy should be communicated to all employees and enforced during the upcoming year. All procurement records for purchases in excess of the threshold should include the following at a minimum: (a) basis for the contractor/goods selected or (b) justification for lack of competition when quotes or competitive bids are not obtained. Additionally, the conclusion should be clearly documented and accompany the procurement documentation. We also believe that all long-standing contractual engagements should evidence occasional re-evaluation to ensure such relationships are free of conflicts.
Assistance Listing Number:21.027Program:COVID-19 – Coronavirus State and Local Fiscal Recovery FundsFederal Agency:U.S. Department of the TreasuryPass-Through Agencies:Arizona State Office of the Governor; Maricopa CountyPass-Through Grantor Identifying Number:UnknownAward Year:March 1, 2022 to September 30, 2024Compliance Requirement:Procurement, suspension and debarmentCriteria or Specific Requirement:In accordance with 2 CFR § 200.318 – Procurement Standards, the Association is required to maintain records to sufficiently detail the history of each procurement transaction, including the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price.Condition:The Association did not retain documentation regarding the procurement procedures performed over one of the vendors tested. Questioned Costs:N/AContext:In a population of 129 program costs, we conducted a non-statistical sample of 13 transactions. In our sample of 13 transactions, one procurement was above the micro-purchase but below the small purchase threshold for which there was no documentation retained regarding quotes or rates obtained from other vendors. Per review of all program costs, the untested costs either fell below the micro-purchase threshold or were explicitly named in the approved budget. Additionally, the Association has a written procurement policy that aligns with the requirements of 2 CFR § 200.318. As such this is deemed to be a significant deficiency in internal controls over compliance.Cause:The Association did not follow its procurement policy when purchasing goods and services under the federal award.Effect:Undocumented procurement decisions could violate the requirements of 2 CFR § 200.318.Repeat Finding:Not a repeat finding.Recommendation:We recommend implementing stronger controls to ensure adherence to the policies that conform to 2 CFR § 200.318.Views of Responsible Officials and Planned Corrective Actions:Management of the Association concurs with the finding. See Corrective Action Plan.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. 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. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. 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. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. 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. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. 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. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. 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. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. 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. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. 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. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. 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. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Assistance Listing Number(s): 10.912 Name of Federal Program or Cluster: Environmental Quality Incentives Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Assistance Listing Number(s): 10.924 Name of Federal Program or Cluster: Conservation Stewardship Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies. Condition: There are no written policies and procedures for allowable costs/cost principles, cash management, procurement and suspension and debarment requirements. Cause: The Organization does not have a process for reviewing their accounting policies and procedures manual on a regular basis to ensure written procedures conform to Uniform Guidance requirements. Effect or Potential Effect: A lack of written policies, procedures, and standards of conduct may result in noncompliance with the requirements of federal programs and/or disallowed costs. Repeat Finding: No Recommendation: We recommend the Organization’s written policies and procedures be reviewed and updated for compliance with Uniform Guidance. The organization should become familiar with the requirements of Subparts D and E of 2 CFR Part 200 and establish appropriate written policies, procedures, and standards of conduct. Views of Responsible Officials: Management agrees with the finding and they will evaluate our findings to determine an appropriate corrective action.
Assistance Listing Number(s): 10.912 Name of Federal Program or Cluster: Environmental Quality Incentives Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Assistance Listing Number(s): 10.924 Name of Federal Program or Cluster: Conservation Stewardship Program Name of Federal Agency: Department of Agriculture Award Periods: September 3, 2019 through July 31, 2024 and September 30, 2020 through September 30, 2025 Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies. Condition: There are no written policies and procedures for allowable costs/cost principles, cash management, procurement and suspension and debarment requirements. Cause: The Organization does not have a process for reviewing their accounting policies and procedures manual on a regular basis to ensure written procedures conform to Uniform Guidance requirements. Effect or Potential Effect: A lack of written policies, procedures, and standards of conduct may result in noncompliance with the requirements of federal programs and/or disallowed costs. Repeat Finding: No Recommendation: We recommend the Organization’s written policies and procedures be reviewed and updated for compliance with Uniform Guidance. The organization should become familiar with the requirements of Subparts D and E of 2 CFR Part 200 and establish appropriate written policies, procedures, and standards of conduct. Views of Responsible Officials: Management agrees with the finding and they will evaluate our findings to determine an appropriate corrective action.
2023-001 The City did not have adequate internal controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 20.205 Highway Planning and Construction Federal Grantor Name: Federal Highway Administration, US Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-10390 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2023, the City spent $2,783,693 in federal Highway Planning and Construction program funds awarded from the Federal Highway Administration and passed through the Washington State Department of Transportation. During 2023, the City used program funds for the Thornton, Vista to Malloy project. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must reflect the most restrictive of federal, state or local procurement thresholds and methods when using federal funds. Additionally, federal regulations require recipients to maintain written standards of conduct that cover conflicts of interest and govern the actions of employees involved in selecting, awarding or administrating contracts procured with federal funds. Description of Condition Our audit found the City’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the City did not have procurement policies or procedures to ensure compliance with federal requirements. Further, the City did not have standards of conduct policies or procedures covering conflicts of interest for officers or agents who award contracts, as federal regulations require. We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition This is the City’s first federal single audit since 2016. Since the City did not regularly manage federal funds since then, staff were unaware of the requirement to have written policies and procedures over procurement and standards of conduct covering conflicts of interest for officers and agents. Effect of Condition Without written policies and procedures, the City is at an increased risk of not complying with following the most restrictive of federal, state or local procurement methods and standards of conduct requirements when using federal funds to procure contractors. Although the City did not have policies in place, it followed the procurement requirements in the Washington State Department of Transportation’s Local Agency Guidelines Manual and complied with federal requirements for soliciting and awarding the public works contracts we tested. Recommendation We recommend the City develop written procurement and standards of conduct policies and procedures that conform to federal procurement standards in Uniform Guidance (2 CFR 200.318-327). City’s Response The City is currently in the process of adopting a comprehensive purchasing and procurement policy, with the goal of implementing the major components of these policies by the end of April 2025. Although the City has consistently followed established purchasing procedures, including redundant reviews and purchasing limits, these practices have occasionally varied across departments and have not been formally codified. The City acknowledges that formal adoption of purchasing policies not only ensures consistency in procurement practices across the organization but also serves as a valuable resource for employee training, particularly when making purchasing decisions that are uncommon for the jurisdiction. In recent years, the City has reexamined its broad range of financial responsibilities, including procurement, and has considered delaying the adoption of new policies until the landscape of these changes stabilizes. However, in its ongoing commitment to continuous improvement, the City has determined that adopting purchasing and procurement policies that address the majority of the City’s procurement decisions is the most effective course of action. These policies will be subject to ongoing refinement and updates over time. The City remains receptive to insights and recommendations, such as those provided by the SAO, which contribute to the enhancement of its processes. Auditor’s Remarks We appreciate the City's commitment to resolve this finding and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures
2023-003 Procurement (Significant Deficiency) U.S. Department of Treasury 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: The Uniform Guidance required that an Organization have written procurement policies in place to comply with 2 CFR Sections 200.318-300.327 when procurement is applicable to a federal program. According to the compliance requirements matrix, procurement is applicable to ALN #21.027. Condition: While testing the procurement compliance requirement we found that the Organization does not have a written procurement policy. We did not, however, find any evidence of material noncompliance related to this requirement. Cause: Management does not regularly expend federal dollars above the threshold requiring a Single Audit under the Uniform Guidance. As such, policies related to procurement were not adopted. Effect: Internal controls surrounding Uniform Guidance are incomplete. Questioned Costs: None noted. Recommendation: Management should review 2 CFR Sections 200.138 – 300.327 and develop written policies that comply with the compliance requirements. Views of Responsible Officials and Planned Corrective Actions: The Organization will review CFR Sections 200.138 and 300.327 and develop written policies that align with the compliance requirements. Monique Johnson, Executive Director of Allen County Drug & Alcohol Consortium, is responsible for this corrective action. The anticipated completion date is June 30, 2025.
SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Town of Eatonville January 1, 2023 through December 31, 2023 2023-001 The Town did not have adequate internal controls for ensuring compliance with federal procurement requirements. Assistance Listing Number and Title: 20.205, Highway Planning and Construction Federal Grantor Name: Federal Highway Administration, U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: LA-7563 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background During fiscal year 2023, the Town spent $1,874,183 in federal Highway Planning and Construction program funds awarded from the Federal Highway Administration and passed through the Washington State Department of Transportation. During 2023, the Town used program funding on one project. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must reflect the most restrictive of federal, state or local procurement thresholds and methods when using federal funds. Additionally, federal regulations require recipients to maintain written standards of conduct that cover conflicts of interest and govern the actions of employees involved in selecting, awarding or administrating contracts procured with federal funds. Description of Condition Our audit found the Town’s internal controls were ineffective for ensuring compliance with federal procurement requirements. Specifically, the Town did not have procurement policies or procedures to ensure compliance with federal requirements. Further, the Town did not have standards of conduct policies or procedures covering conflicts of interest as federal regulations require. We consider this deficiency in internal controls to be a significant deficiency. Cause of Condition This is the Town’s first federal program audit since 2013. Since the Town does not regularly manage federal funds, staff did not know about the requirement to have written standards of conduct and procurement policies or procedures. Effect of Condition Without written policies and procedures, the Town is at an increased risk of not complying with following the most restrictive of federal, state or local procurement methods and standards of conduct requirements when using federal funds to procure contractors. Although the Town does not have policies in place, it followed the procurement requirements in the Washington State Department of Transportation’s Local Agency Guidelines Manual and complied with federal requirements for soliciting and awarding the public works contract we tested. Recommendation We recommend the Town develop written procurement and standards of conduct policies and procedures that conform to federal procurement standards in Uniform Guidance (2 CFR 200.318-327). Town’s Response The Town agrees with the findings as presented and is committed to adopting the required polices. The Town does typically not rely on federal funds of this magnitude and was not aware of the compliance requirements. The Town commits to developing written procurement standards in Uniform Guidance (2 CFR 200.318-327) and implementing internal controls to ensure compliance with federal procurement requirements at the Town staff level rather than relying so heavily on consultants. Auditor’s Remarks We appreciate the Town’s commitment to resolve this finding. We will review the corrective action taken during our next regular audit. We thank the Town for its cooperation and assistance during the audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures.
Condition: The Land Bank has not adopted a written procurement policy. The Land Bank did not retain supporting documentation for procurements entered during the year ended December 31, 2023. Context: The Land Bank represented contractors were evaluated by analyzing City of Wilmington permit information. The Land Bank did not retain documentation of this analysis to support its procurement actions. Criteria: CFR § 200.318, General Procurement Standards and § 200.320 Methods of Procurement to be Followed, of the Uniform Guidance apply to the State and Local Fiscal Recovery Funds Program and require the following: i. The Land Bank must adopt documented procurement procedures that are consistent with the applicable State, local and federal regulations. ii. The Land Bank’s documented procurement procedures must include the following elements at a minimum: a. Micro-purposes - purchases up to $50,000 may be made without soliciting competitive price or rate quotations if the price is considered reasonable. b. Small Purchases - purchases between $50,000 and $250,000 may be made with soliciting competitive price or rate quotations from an adequate number of qualified sources. c. Formal Procedures - purchases over $250,000 must be made by sealed bid or competitive proposal. Cause: The Land Bank does not have a written procurement policy. Questioned Costs: None Effect: The Land Bank did comply with the Uniform Guidance requirement to adopt a procurement policy and did not fully document its procurement actions. Recommendation: We recommend Land Bank establish a procurement policy and prepare documentation for each procurement action.
2023-001 – Uniform Guidance Procurement Standards Criteria: One of the more significant provisions of the Uniform Guidance that affects the District is the procurement standards under 2 CFR sections 200.318 through 200.327. Under the procurement standards, the Trust is required to have a documented purchasing policy, which at a minimum incorporates the provisions of the Uniform Guidance. Statement of Condition: The Office of Management and Budget (OMB) revised regulations applicable to federally funded programs. The new regulations are contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Uniform Guidance replaced OMB Circulars A-133, A-87, and A-110 and incorporates new requirements for grant recipients. The Uniform Guidance includes not only protocols for program management and administration, but also updates compliance regulations for federal awards. Currently, the District does not have a formal written procurement policy that incorporates all provisions of the Uniform Guidance procurement standards. Cause: The District has not adopted a procurement policy that covers all aspects required by the Uniform Guidance. However, during our testing of procurement over federal expenditures, we did not notate any violations of the Uniform Guidance procurement standards. Effect: Items required by the Uniform Guidance procurement standards that are not currently addressed in the District’s procurement policy are as follows: • Contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms • General procurement standards, including oversight of contractors, conflicts of interest, and avoidance of duplicative items • Competition • Bonding requirements • Contract provisions • Federal agency or pass-through entity review • Subrecipient and contractor determinations • Retention requirements for records • Domestic preferences • Procurement of recovered materials Recommendation: We recommend that management review the applicable provisions of the Uniform Guidance procurement standards and update the District’s procurement policy appropriately. This would include adding any missing components to the District’s current procurement policy and updating definitions of types of procurement (i.e., micro-purchases, small purchases, and small acquisition threshold), to match the language used in the Uniform Guidance procurement standards. Questioned Costs: None