PROCUREMENT--Questioned Costs: None How the questioned costs were computed: N/A Condition: Wipfli obtained the supporting documentation for purchases of client furnishings, food, a vehicle, and lawn care services. The documentation indicated these vendors were selected based on best price. Turning Point of Central California, Inc. was able to provide explanations for why the vendors were selected, but procurement records supporting the explanations were not available. In addition, Wipfli noted Turning Point of Central California, Inc.’s procurement policy included references to outdated federal regulations and did not comply with all of the procurement requirements in the Uniform Guidance (2 CFR Part 200). This is a repeat finding from the June 30, 2021 and 2022 audits. Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200, section 318(i) (Uniform Guidance) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. The records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contractor type, contractor selection or rejection, and the basis for the contract price. In addition, the Uniform Guidance, 2 CFR Part 200, section 200.118 states that the non-Federal entity must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 and must use their own documented procurement procedures that must conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Section III - Federal Award Findings and Questioned Costs (Continued) Finding 2023-002: Procurement (Continued) Cause: Turning Point of Central California, Inc. did not retain procurement records to support its assertion that it is contracting with vendors that provide the best prices. Turning Point of Central California, Inc. has not updated its procurement policy to comply with the Uniform Guidance (2 CFR Part 200). This finding was first reported in the June 30, 2021 and 2022 audits, issued in June 2022 and June 2023, respectively, and Turning Point of Central California, Inc. did not have adequate time to implement its corrective action plan during the year ended June 30, 2023. Effect: Due to the conditions noted above, Turning Point of Central California, Inc. was not in compliance with the procurement regulations and there exists a material weakness in internal controls over the procurement compliance requirement. Recommendation: We recommend Turning Point of Central California, Inc. implement controls to ensure the procurement decisions are properly documented in accordance with updated internal policies and procedures that conform to the Uniform Guidance (2 CFR Part 200). View of responsible officials: Management agrees with the finding and has submitted a corrective action plan.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-008 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027X Federal Award Number and Year (or Other Identifying Number): 22611-054-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 29 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not have a procurement policy that complied with the procurement standards. In addition, one purchase, totaling $75,387, was identified that fell within the small purchases threshold. The purchase was selected for testing. The School Corporation did not adequately document the history of the procurement, which would have included an awarded contract. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. One covered transaction, totaling $75,387, was identified and selected for testing. The School Corporation did not verify the vendor's suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The Non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 30 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 31 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls and develop policies and procedures to ensure the history of the procurement is maintained for goods within the small purchase threshold and ensure contractors and subrecipients, as appropriate are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-008 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027X Federal Award Number and Year (or Other Identifying Number): 22611-054-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 29 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not have a procurement policy that complied with the procurement standards. In addition, one purchase, totaling $75,387, was identified that fell within the small purchases threshold. The purchase was selected for testing. The School Corporation did not adequately document the history of the procurement, which would have included an awarded contract. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. One covered transaction, totaling $75,387, was identified and selected for testing. The School Corporation did not verify the vendor's suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The Non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 30 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: INDIANA STATE BOARD OF ACCOUNTS 31 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls and develop policies and procedures to ensure the history of the procurement is maintained for goods within the small purchase threshold and ensure contractors and subrecipients, as appropriate are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-001: Paper/Chemical Product Contract Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559/10.582 Compliance Requirement: Procurement, Suspension and Debarment Award Period: Fiscal Year 2023 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. Condition/Context: The Board did not follow the established procurement policy for their paper/chemical contract. Questioned Costs: Undetermined Cause: The Board allowed prior bid contract to expire. Effect: The Board did not have a competitively bid contract in place during fiscal year 2023 for paper/chemical products. Repeat Finding: No Recommendation: We recommend following the Board’s established procurement policy providing for competitive bid. Views of Responsible Officials: The Board has addressed this finding. Beginning in December 2023, the Board has entered into a contract with a vendor that was awarded the competitive bid for paper/chemical products.
Finding 2023-001: Paper/Chemical Product Contract Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559/10.582 Compliance Requirement: Procurement, Suspension and Debarment Award Period: Fiscal Year 2023 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. Condition/Context: The Board did not follow the established procurement policy for their paper/chemical contract. Questioned Costs: Undetermined Cause: The Board allowed prior bid contract to expire. Effect: The Board did not have a competitively bid contract in place during fiscal year 2023 for paper/chemical products. Repeat Finding: No Recommendation: We recommend following the Board’s established procurement policy providing for competitive bid. Views of Responsible Officials: The Board has addressed this finding. Beginning in December 2023, the Board has entered into a contract with a vendor that was awarded the competitive bid for paper/chemical products.
Finding 2023-001: Paper/Chemical Product Contract Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559/10.582 Compliance Requirement: Procurement, Suspension and Debarment Award Period: Fiscal Year 2023 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. Condition/Context: The Board did not follow the established procurement policy for their paper/chemical contract. Questioned Costs: Undetermined Cause: The Board allowed prior bid contract to expire. Effect: The Board did not have a competitively bid contract in place during fiscal year 2023 for paper/chemical products. Repeat Finding: No Recommendation: We recommend following the Board’s established procurement policy providing for competitive bid. Views of Responsible Officials: The Board has addressed this finding. Beginning in December 2023, the Board has entered into a contract with a vendor that was awarded the competitive bid for paper/chemical products.
Finding 2023-001: Paper/Chemical Product Contract Federal Agency: U.S. Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559/10.582 Compliance Requirement: Procurement, Suspension and Debarment Award Period: Fiscal Year 2023 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. Condition/Context: The Board did not follow the established procurement policy for their paper/chemical contract. Questioned Costs: Undetermined Cause: The Board allowed prior bid contract to expire. Effect: The Board did not have a competitively bid contract in place during fiscal year 2023 for paper/chemical products. Repeat Finding: No Recommendation: We recommend following the Board’s established procurement policy providing for competitive bid. Views of Responsible Officials: The Board has addressed this finding. Beginning in December 2023, the Board has entered into a contract with a vendor that was awarded the competitive bid for paper/chemical products.
FINDING 2023-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2021-22, SY 2022-23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of four vendors were identified for procurement that fell within the small purchases range. All four vendors were selected for testing. For three of the four vendors tested, the School Corporation could not provide evidence that price or rate quotes were obtained. In addition, the School Corporation did not obtain a contract for two of three vendors as required by Indiana Code for purchases between $50,000 and $150,000. Finally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for these vendors. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures included an appendix in the contract that a vendor will sign, stating they are not suspended or debarred or the School Corporation will check the SAMs website to ensure that the vendor is not suspended or debarred. Five covered transactions that equaled or exceeded $25,000 were identified. All five transactions, totaling $3,936,236 were selected for testing. For three of the five vendors, the School Corporation had not performed procedures to ensure the vendors, paid a total of $192,750, were not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed or implemented, which includes segregation of key functions, by management of the School Corporation to ensure that policies and procedures were in place related to procurement and suspension and debarment. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded and for small purchases an adequate number of quotes were not obtained. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services, and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2021-22, SY 2022-23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of four vendors were identified for procurement that fell within the small purchases range. All four vendors were selected for testing. For three of the four vendors tested, the School Corporation could not provide evidence that price or rate quotes were obtained. In addition, the School Corporation did not obtain a contract for two of three vendors as required by Indiana Code for purchases between $50,000 and $150,000. Finally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for these vendors. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures included an appendix in the contract that a vendor will sign, stating they are not suspended or debarred or the School Corporation will check the SAMs website to ensure that the vendor is not suspended or debarred. Five covered transactions that equaled or exceeded $25,000 were identified. All five transactions, totaling $3,936,236 were selected for testing. For three of the five vendors, the School Corporation had not performed procedures to ensure the vendors, paid a total of $192,750, were not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed or implemented, which includes segregation of key functions, by management of the School Corporation to ensure that policies and procedures were in place related to procurement and suspension and debarment. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded and for small purchases an adequate number of quotes were not obtained. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services, and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2021-22, SY 2022-23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of four vendors were identified for procurement that fell within the small purchases range. All four vendors were selected for testing. For three of the four vendors tested, the School Corporation could not provide evidence that price or rate quotes were obtained. In addition, the School Corporation did not obtain a contract for two of three vendors as required by Indiana Code for purchases between $50,000 and $150,000. Finally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for these vendors. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures included an appendix in the contract that a vendor will sign, stating they are not suspended or debarred or the School Corporation will check the SAMs website to ensure that the vendor is not suspended or debarred. Five covered transactions that equaled or exceeded $25,000 were identified. All five transactions, totaling $3,936,236 were selected for testing. For three of the five vendors, the School Corporation had not performed procedures to ensure the vendors, paid a total of $192,750, were not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed or implemented, which includes segregation of key functions, by management of the School Corporation to ensure that policies and procedures were in place related to procurement and suspension and debarment. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded and for small purchases an adequate number of quotes were not obtained. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services, and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2021-22, SY 2022-23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of four vendors were identified for procurement that fell within the small purchases range. All four vendors were selected for testing. For three of the four vendors tested, the School Corporation could not provide evidence that price or rate quotes were obtained. In addition, the School Corporation did not obtain a contract for two of three vendors as required by Indiana Code for purchases between $50,000 and $150,000. Finally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for these vendors. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures included an appendix in the contract that a vendor will sign, stating they are not suspended or debarred or the School Corporation will check the SAMs website to ensure that the vendor is not suspended or debarred. Five covered transactions that equaled or exceeded $25,000 were identified. All five transactions, totaling $3,936,236 were selected for testing. For three of the five vendors, the School Corporation had not performed procedures to ensure the vendors, paid a total of $192,750, were not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed or implemented, which includes segregation of key functions, by management of the School Corporation to ensure that policies and procedures were in place related to procurement and suspension and debarment. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded and for small purchases an adequate number of quotes were not obtained. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services, and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2021-22, SY 2022-23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of four vendors were identified for procurement that fell within the small purchases range. All four vendors were selected for testing. For three of the four vendors tested, the School Corporation could not provide evidence that price or rate quotes were obtained. In addition, the School Corporation did not obtain a contract for two of three vendors as required by Indiana Code for purchases between $50,000 and $150,000. Finally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for these vendors. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures included an appendix in the contract that a vendor will sign, stating they are not suspended or debarred or the School Corporation will check the SAMs website to ensure that the vendor is not suspended or debarred. Five covered transactions that equaled or exceeded $25,000 were identified. All five transactions, totaling $3,936,236 were selected for testing. For three of the five vendors, the School Corporation had not performed procedures to ensure the vendors, paid a total of $192,750, were not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed or implemented, which includes segregation of key functions, by management of the School Corporation to ensure that policies and procedures were in place related to procurement and suspension and debarment. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded and for small purchases an adequate number of quotes were not obtained. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services, and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2021-22, SY 2022-23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of four vendors were identified for procurement that fell within the small purchases range. All four vendors were selected for testing. For three of the four vendors tested, the School Corporation could not provide evidence that price or rate quotes were obtained. In addition, the School Corporation did not obtain a contract for two of three vendors as required by Indiana Code for purchases between $50,000 and $150,000. Finally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for these vendors. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures included an appendix in the contract that a vendor will sign, stating they are not suspended or debarred or the School Corporation will check the SAMs website to ensure that the vendor is not suspended or debarred. Five covered transactions that equaled or exceeded $25,000 were identified. All five transactions, totaling $3,936,236 were selected for testing. For three of the five vendors, the School Corporation had not performed procedures to ensure the vendors, paid a total of $192,750, were not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed or implemented, which includes segregation of key functions, by management of the School Corporation to ensure that policies and procedures were in place related to procurement and suspension and debarment. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded and for small purchases an adequate number of quotes were not obtained. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services, and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
CONDITION: The Western Beaver County School District contracted with two (2) third-party vendors – CCL Technologies and AVI-SPL LLC for the purchase of technology equipment. The contracts were procured through a cooperative purchasing group. The District 1) was unable to provide documentation from the cooperative purchasing group to verify that the technology procurement contracts were competitively procured, such as a bid evaluation and public solicitation and 2) did not obtain the adequate number of price or rate quotations. CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District 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. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PS 8.807.1, there should be three quotes that are either written or well documented. CAUSE: School District personnel directly responsible for the oversight and execution of the technology contracts interpreted that the requirements specified by 2 CFR 200.318(i) and 2 CFR 200.320(a)(2)(i), would be met through the cooperative purchasing, however the District appears to not have received and maintained all of the specific history of procurement documents internally, as referenced under the criteria section, to support this compliance. In addition, the District did not maintain documentation to substantiate that an adequate number of price quotations were solicited. EFFECT: The Western Beaver County School District did not comply with the requirements of 2 CFR 200.318(i) and 2 CFR 200.320(a)(2)(i) of the Uniform Guidance, regarding maintaining records sufficient to detail the history of procurement for the technology equipment. In addition, the District did not comply with 24 PS 8.807.1 regarding maintaining documentation to substantiate that an adequate number of price quotations for the technology equipment. QUESTIONED COST: $152,796 (CCL Technologies), $121,290 (AVI-SPL LLC) RECOMMENDATION: I am recommending that the management of the School District review and update as necessary its procurement policies to ensure retention of the appropriate procurement documentation, in all instances, including such instances whereby the District is using a contract vehicle from a cooperative purchase network so as to comply with all applicable sections of the Uniform Guidance, specifically Section 2 CFR 200.318(i) and 2 CFR.320(a)(2)(i) of the Uniform Guidance. In addition, it is recommended that the District document its attempts to obtain an adequate number of price or rate quotations as specified by 24 PS 8.807.1 over the $10,000 expenditure threshold. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The Beaver County Career and Technical School contracted with a third-party vendor – Huckstein Mechanical for upgrades to the HVAC system at the Center. The contract was procured through a cooperative purchasing group. The Center 1) was unable to provide documentation from the cooperative purchasing group to verify that the HVAC system upgrade contract was competitively procured, such as a bid evaluation and public solicitation and 2) did not obtain the adequate number of price or rate quotations. CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the Center 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. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PS 8.807.1, there should be three quotes that are either written or well documented. CAUSE: Center personnel directly responsible for the oversight and execution of the HVAC upgrade contract interpreted that the requirements specified by 2 CFR 200.318(i) and 2 CFR 200.320(a)(2)(i), would be met through the cooperative purchasing, however the Center appears to not have received and maintained all of the specific history of procurement documents internally, as referenced under the criteria section, to support this compliance. In addition, the Center did not maintain documentation to substantiate that an adequate number of price quotations were solicited. EFFECT: The Beaver County Career and Technical Center did not comply with the requirements of 2 CFR 200.318(i) and 2 CFR 200.320(a)(2)(i) of the Uniform Guidance, regarding maintaining records sufficient to detail the history of procurement for the HVAC upgrade project. In addition, the Center did not comply with 24 PS 8.807.1 regarding maintaining documentation to substantiate that an adequate number of price quotations for the HVAC upgrade project. QUESTIONED COST: $547,457 RECOMMENDATION: I am recommending that the management of the Center review and update as necessary its procurement policies to ensure retention of the appropriate procurement documentation, in all instances, including such instances whereby the Center is using a contract vehicle from a cooperative purchase network so as to comply with all applicable sections of the Uniform Guidance, specifically Section 2 CFR 200.318(i) and 2 CFR.320(a)(2)(i) of the Uniform Guidance. In addition, it is recommended that the Center document its attempts to obtain an adequate number of price or rate quotations as specified by 24 PS 8.807.1 over the $10,000 expenditure threshold. VIEWS OF RESPONSIBLE OFFICIALS: Management of the Center has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The School District of the City of Jeannette contracted with a third-party vendor (ABM Building Solutions LLC) for the performance of an energy savings construction project at the District. The contract with the third-party vendor, which was procured through a cooperative purchasing group, exceeded the threshold for competitive procurement. The District was unable to provide documentation to verify that the third-party procurement contract was competitively procured, such as a bid evaluation and public solicitation. This is a continuing finding from the 2021-2022 fiscal year. CRITERIA: 24 Pa. Statutes 751 of the Public School Code and Section 2 CFR 200.318(i) of the Uniform Guidance prescribes the bidding requirements for equipment, supplies, and work of any nature made by a school district whereby the cost exceeds certain dollar thresholds as adjusted annually for an inflation index. The energy savings construction project exceeded the simplified acquisition threshold of $250,000. As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District 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. CAUSE: School District personnel directly responsible for the oversight and execution of this contract, in an effort to prudently ensure that all compliance matters related to the Uniform Guidance procurement process were adhered to, received and reviewed a detail third-party opinion on the appropriate use of ESSER funding and the procurement process used by the selected contractor. District officials interpreted from this document, that the requirement specified by 2 CFR 200.318(i), based on documentation provided to them by the third-party vendor, would be met, however the District maintained no records internally to support this compliance. EFFECT: The School District of the City of Jeannette did not comply with the requirements of 2 CFR 200.318(i) of the Uniform Guidance with regard to maintaining records sufficient to detail the history of procurement for the energy savings construction project. QUESTIONED COST: $311,785 RECOMMENDATION: I am recommending that the management of the School District review and update as necessary its procurement policies to ensure retention of the appropriate procurement documentation, in all instances, including such instances whereby the District is using a contract vehicle from a cooperative purchase network so as to comply with all applicable sections of the Uniform Guidance, in specifically, Section 2 CFR 200.318(i) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: The School District of the City of Jeannette contracted with a third-party vendor (Smart Solutions Technologies) for technology equipment for the District which exceeded the threshold for competitive procurement. The purchase was procured through a cooperative purchasing group. The District was unable to provide documentation to verify that the third-party procurement contract was competitively procured, such as a bid evaluation and public solicitation. This is a continuing finding from the 2021-2022 fiscal year. CRITERIA: 24 Pa. Statutes 751 of the Public School Code and Section 2 CFR 200.318(i) of the Uniform Guidance prescribes the bidding requirements for equipment, supplies, and work of any nature made by a school district whereby the cost exceeds certain dollar thresholds as adjusted annually for an inflation index. As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District 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. CAUSE: School District personnel directly responsible for the oversight and execution of this contract, unintentionally assumed that this particular third-party contract did not require the specific bidding requirements as outlined in both 24 Pa. Statutes 751 of the Public School Code and Section 2 CFR 200.318(i) of the Uniform Guidance. EFFECT: The School District of the City of Jeannette did not comply with the requirements of 2 CFR 200.318(i) of the Uniform Guidance with regard to maintaining records sufficient to detail the history of procurement for the technology equipment. QUESTIONED COST: $74,231 RECOMMENDATION: I am recommending that the management of the School District review and update as necessary its procurement policies to ensure retention of the appropriate procurement documentation, in all instances, so as to comply with all applicable sections of the Uniform Guidance, in specifically, Section 2 CFR 200.318(i) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).
CONDITION: During my review of The School District of the City of Jeannette’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, or 2) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors – Grade Point Resources ($74,503.17) and VLN Partners, LLP ($52,750.00). CRITERIA: In accordance with 24 PA Statute 8.807.1, the District must obtain/document at least three (3) written or well documented price or rate quotations from a reasonable number of qualified sources for purchases of goods between $10,000 and $$22,500 (threshold established annually). In addition, Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance requires price or rate quotations to be received from an adequate number of qualified sources for purchases above the micro purchase threshold of $10,000 and the simplified acquisition threshold of $250,000. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs (#626), 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $127,253 CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
Criteria or Specific Requirement (Written Procurement Policies and Procedures): Uniform Guidance requires nonfederal entities to have written policies and procedures regarding procurement under federal awards. Regarding this requirements, 2 CFR § 200.318(a), states: “The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327.” Condition: We requested the District’s procurement policies and procedures. The District provided “POLICY 3170.” This policy includes general provisions in only a few areas: (1) purchases under or equal to $1000; (2) purchases from $1000 to $20,000; (3) purchases over $20,000; (4) provision for local preference; and (5) provision for vehicle purchases. POLICY 3170 does not appear to deal with procurement for federal grants or Uniform Guidance 2 CFR §§ 200.317 through 200.327. The District provided evidence of its intent to adopt new procurement policies and procedures. This is certainly a positive occurrence, but revision to the policies should have, instead, occurred prior to the beginning of the audit year 2022-2023. Cause: It appears that the primary cause of this condition is that the District does not have experience with procurement procedures under Uniform Guidance. Indeed, the District has not been required to have a Single Audit since the fiscal year ending June 30, 2013. Effect: Procurement policies and procedures are the base of internal control for procurement. Without adoption of procurement policies and procedures, non-compliance with procurement requirements is significantly more likely. Questioned costs: No costs are questioned. Perspective: The situation is somewhat offset by the fact that the District hired outside construction managers on both projects who were both experienced in federal grants and sewer projects. Further, despite the lack of appropriate Uniform Guidance procurement policies and procedures, the District did comply with most provisions of 2 CFR §§ 200.317 through 200.327. Repeat Finding: This is not a repeat finding. Recommendation: We would recommend that the District move forward with drafting procurement, debarment, and further conflict of interest policies and procedures for federal awards. We recommend that the District review 2 CFR §§ 200.317 through 200.327 and make sure that each requirement is dealt with in the District’s new policies and procedures. It is noted that for purchases up to the Micro-purchase amount of $10,000, that competitive price or even rate quotes are not necessary as long as the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. 2 CFR § 200.320(a)(1). Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
Criteria or Specific Requirement (Written Procurement Policies and Procedures): Uniform Guidance requires nonfederal entities to have written policies and procedures regarding procurement under federal awards. Regarding this requirements, 2 CFR § 200.318(a), states: “The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327.” Condition: We requested the District’s procurement policies and procedures. The District provided “POLICY 3170.” This policy includes general provisions in only a few areas: (1) purchases under or equal to $1000; (2) purchases from $1000 to $20,000; (3) purchases over $20,000; (4) provision for local preference; and (5) provision for vehicle purchases. POLICY 3170 does not appear to deal with procurement for federal grants or Uniform Guidance 2 CFR §§ 200.317 through 200.327. The District provided evidence of its intent to adopt new procurement policies and procedures. This is certainly a positive occurrence, but revision to the policies should have, instead, occurred prior to the beginning of the audit year 2022-2023. Cause: It appears that the primary cause of this condition is that the District does not have experience with procurement procedures under Uniform Guidance. Indeed, the District has not been required to have a Single Audit since the fiscal year ending June 30, 2013. Effect: Procurement policies and procedures are the base of internal control for procurement. Without adoption of procurement policies and procedures, non-compliance with procurement requirements is significantly more likely. Questioned costs: No costs are questioned. Perspective: The situation is somewhat offset by the fact that the District hired outside construction managers on both projects who were both experienced in federal grants and sewer projects. Further, despite the lack of appropriate Uniform Guidance procurement policies and procedures, the District did comply with most provisions of 2 CFR §§ 200.317 through 200.327. Repeat Finding: This is not a repeat finding. Recommendation: We would recommend that the District move forward with drafting procurement, debarment, and further conflict of interest policies and procedures for federal awards. We recommend that the District review 2 CFR §§ 200.317 through 200.327 and make sure that each requirement is dealt with in the District’s new policies and procedures. It is noted that for purchases up to the Micro-purchase amount of $10,000, that competitive price or even rate quotes are not necessary as long as the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. 2 CFR § 200.320(a)(1). Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
Criteria or Specific Requirement (Documentation of Procurement File): Uniform Guidance under 2 CFR 200.318(i), provides that a “nonfederal entity must maintain records sufficient to detail the history of procurement.” These records shall include: “rationale for the method of procurement, contractor selection or rejection, and the basis for the contract price.” Further, Uniform Guidance contains procurement requirements for architectural and engineering services under 200.320(b)(2)(iv). Such policies and procedures for architectural and engineering services provide that competitive proposals for professional services whereby offeror's qualifications are evaluated and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation.” Condition: Capitalization Grants for Clean Water State Revolving Funds, CFDA 66.458: The engineer/construction manager on this project was selected for testing from a population of two vendors over the individually significant threshold of $47,219. The District explains that the District and the engineer/construction manager have a relationship which goes back 60 years. This engineering firm acts as the outside engineer for the District. The District further explains that this engineering firm has successfully completed numerous similar, smaller scale projects for the District and that this engineer is very familiar with the District’s existing system. The District further explains that these criteria were important considerations in selection this engineering firm for engineering services and construction management. We inquired about documentation of the rationale for the method of procurement, basis of contract price and negotiation of fair and reasonable compensation. The District’s file did not contain documentation of such. Water and Waste Disposal Systems for Rural Communities, CFDA 10.760: We selected a sample of three from a population of five vendors over the individually significant threshold of $29,516 for this grant. We noted one exception. The District explained the rationale for the vendor selection stating that unique construction material had to match other such construction material previously installed. However, the District did not have documentation of the rational for selection and negotiation of the price in the procurement file. Cause: It appears that the primary cause of this condition is that the District does not have experience with procurement procedures under Uniform Guidance. Indeed, the District has not been required to have a Single Audit since the fiscal year ending June 30, 2013. Effect: Without a document which shows a rational for selection of, and arrival at the price, there is no way to monitor this aspect of the procurement process. Questioned costs: No costs are questioned. Perspective: We noted extensive documentation of the general contractor procurement with bidding procedures, advertising for bids, etc. In all tests, the District’s explanations as to why a particular vendor was selected appeared reasonable. Nonetheless, the requirement is that the District document the “rationale for the method of procurement, contractor selection or rejection, and the basis for the contract price.” Perspective Specific to CFDA 10.760. A sample of three was selected from a population of five vendors over the micro-purchase threshold of $10,000. There was one exception. Under attribute sampling, this is an exception rate of 33%. However, we note that the one exception represented only 1.37% of the dollar value of sample selected. Extrapolating the 1.37% to the population, the expected dollar error for debarment checks is $30,353. Perspective Specific to CFDA 66.458: Initially, we noted that the population was two vendors over the micro-purchase threshold of $10,000. We selected a sample of one with no exceptions. However, it came to our attention that grantor had questioned procurement procedures for the engineer. We determined to test this procurement and noted an exception. Under attribute sampling, this is an exception rate of 50%. However, we note that the one exception represented 19.38% of the dollar value of the total population. As 100% of the population of two was tested, no extrapolation is suggested. Repeat Finding: This is not a repeat finding. Recommendation: We would recommend that the District adopt policies and procedures under 2 CFR 200.318(i) and 200.320(b)(2)(iv) requiring documentation of procurement “rationale for the method of procurement, . . . contractor selection or rejection, and the basis for the contract price and also negotiation of fair and reasonable compensation when architectural or engineering services are procured. Further, we recommend that a monitoring procedure be implemented to review for compliance with these procedures. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
Criteria or Specific Requirement (Documentation of Procurement File): Uniform Guidance under 2 CFR 200.318(i), provides that a “nonfederal entity must maintain records sufficient to detail the history of procurement.” These records shall include: “rationale for the method of procurement, contractor selection or rejection, and the basis for the contract price.” Further, Uniform Guidance contains procurement requirements for architectural and engineering services under 200.320(b)(2)(iv). Such policies and procedures for architectural and engineering services provide that competitive proposals for professional services whereby offeror's qualifications are evaluated and the most qualified offeror is selected, subject to negotiation of fair and reasonable compensation.” Condition: Capitalization Grants for Clean Water State Revolving Funds, CFDA 66.458: The engineer/construction manager on this project was selected for testing from a population of two vendors over the individually significant threshold of $47,219. The District explains that the District and the engineer/construction manager have a relationship which goes back 60 years. This engineering firm acts as the outside engineer for the District. The District further explains that this engineering firm has successfully completed numerous similar, smaller scale projects for the District and that this engineer is very familiar with the District’s existing system. The District further explains that these criteria were important considerations in selection this engineering firm for engineering services and construction management. We inquired about documentation of the rationale for the method of procurement, basis of contract price and negotiation of fair and reasonable compensation. The District’s file did not contain documentation of such. Water and Waste Disposal Systems for Rural Communities, CFDA 10.760: We selected a sample of three from a population of five vendors over the individually significant threshold of $29,516 for this grant. We noted one exception. The District explained the rationale for the vendor selection stating that unique construction material had to match other such construction material previously installed. However, the District did not have documentation of the rational for selection and negotiation of the price in the procurement file. Cause: It appears that the primary cause of this condition is that the District does not have experience with procurement procedures under Uniform Guidance. Indeed, the District has not been required to have a Single Audit since the fiscal year ending June 30, 2013. Effect: Without a document which shows a rational for selection of, and arrival at the price, there is no way to monitor this aspect of the procurement process. Questioned costs: No costs are questioned. Perspective: We noted extensive documentation of the general contractor procurement with bidding procedures, advertising for bids, etc. In all tests, the District’s explanations as to why a particular vendor was selected appeared reasonable. Nonetheless, the requirement is that the District document the “rationale for the method of procurement, contractor selection or rejection, and the basis for the contract price.” Perspective Specific to CFDA 10.760. A sample of three was selected from a population of five vendors over the micro-purchase threshold of $10,000. There was one exception. Under attribute sampling, this is an exception rate of 33%. However, we note that the one exception represented only 1.37% of the dollar value of sample selected. Extrapolating the 1.37% to the population, the expected dollar error for debarment checks is $30,353. Perspective Specific to CFDA 66.458: Initially, we noted that the population was two vendors over the micro-purchase threshold of $10,000. We selected a sample of one with no exceptions. However, it came to our attention that grantor had questioned procurement procedures for the engineer. We determined to test this procurement and noted an exception. Under attribute sampling, this is an exception rate of 50%. However, we note that the one exception represented 19.38% of the dollar value of the total population. As 100% of the population of two was tested, no extrapolation is suggested. Repeat Finding: This is not a repeat finding. Recommendation: We would recommend that the District adopt policies and procedures under 2 CFR 200.318(i) and 200.320(b)(2)(iv) requiring documentation of procurement “rationale for the method of procurement, . . . contractor selection or rejection, and the basis for the contract price and also negotiation of fair and reasonable compensation when architectural or engineering services are procured. Further, we recommend that a monitoring procedure be implemented to review for compliance with these procedures. Views of responsible officials: Management’s response is reported in “Management’s Response and Corrective Action Plan” included in a separate section at the end of this report.
Federal Agency: U.S. Department of Justice Federal Program Title: Crime Victim Assistance Federal Assistance Listing Number: 16.575 Pass-Through Agency: Minnesota Office of Justice Programs Pass-Through Number(s): A-CVS-2022-AMS-157 Award Period: 10/01/2021 to 09/30/2023 Type of Finding: • Material Weakness in Internal Control over Major Federal Programs, Material Noncompliance, and Other Matters 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. Condition: The Organization does not have a written procurement policy in accordance with Uniform Guidance. In addition, during our testing, we noted the Organization did not apply any procurement procedures for three small purchases as they did not perform appropriate procedures nor retain adequate documentation in accordance with Uniform Guidance. Questioned Costs: $46,557 Context: The Organization should develop a procurement policy that conforms with Uniform Guidance. Three out of the three procurement selections did not have procurement procedures followed. Cause: The Organization was unaware its policy was not in accordance with Uniform Guidance; thus, leading to the lack of procedures performed and documentation retained. 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 also provide training to the various individuals involved in the procurement process to ensure they understand the applicable requirements. Views of Responsible Officials and Planned Corrective Actions: The Organization will review the procurement standards as well as provide the necessary training to understand applicable procurement requirements.
Title V Grant Procurement DEPARTMENT OF EDUCATION ALN #: 84.031S Federal Award Identification #: P031S200171 Condition: The University does not have a purchasing or competitive bid policy that follows the federal regulations. The University did not follow its policy and federal procurement requirements when making purchasing and vendor decisions with Title V grant funds. Criteria: 2 CFR 200.318 through 200.327 Questioned Costs: $0 Context: While the expenditures tested as part of the audit met allowable cost and allowable activities requirements, the University did not follow its competitive bid policy nor were minimum federal procurement requirements followed properly. Cause: University personnel were unfamiliar with the federal procurement requirements. Effect: Noncompliance with procurement requirements that could impact future funding opportunities. Identification as repeat finding, if applicable: Not applicable Recommendation: We recommend the University update their policies that follow the federal procurement requirements and the University implement procedures and controls to help prevent deviations from the policies. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Criteria or specific requirement: According to § 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.318 General procurement standards of 2 CFR Part 200, the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. According to § 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a federal financial assistance award exceeds the SAT, or a lower threshold established by a nonfederal entity, formal procurement methods are required. According to § 180.300 of Subpart C - Responsibilities of Participants Regarding Transactions Doing Business With Other Persons of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. According to Section 3.4 Formal Solicitations of the County's Purchasing Policy, Purchases of goods and services with an estimated cost of $25,000 or more (including tax, installation, and freight), shall be made as the result of a Formal Solicitation process including but not limited to Invitations for Bids, Requests for Proposals, Requests for Qualifications, Requests for Information and any other formal solicitation method that can be completed within a timeframe that allows for the solicitation, evaluation and approval in accordance with this Section. Formal solicitations may be solicited through Purchasing’s web based system or as otherwise directed by the Purchasing Agent. According to Section 3.5 Exceptions to Competitive Solicitation of the County's Purchasing Policy, in certain circumstances competitive solicitations may not be the most cost-effective approach for procurement. The Board of Supervisors, County Executive, or Purchasing may waive requirements for competitive solicitations in accordance with the grounds permitted by law. Key exemption categories are identified in the Purchasing Policy. Exceptions are not intended to circumvent the competitive process and related County policies and does not eliminate the need to ensure purchases are competitively priced and the terms and conditions of the purchase are in the best interests of the County. A written determination of the basis for the exception to competitive solicitation and the reason for the selection of the particular source shall be included in Purchasing’s records. According to the County's suspension and debarment verification process, prior to entering into an applicable contract or subrecipient agreement, department will verify on SAM.gov if an entity is listed as suspended or debarred. Condition: The County did not follow federal procurement and suspension and debarment regulation nor its purchasing policy and suspension and debarment verification procedures. Questioned costs: None Context: During our testing, we noted the following matters related to procurement and suspension and debarment. Assistance Listing Number 21.027 • For one of eleven procurements, there is no written justification, documentary support, nor evidence of approval of the emergency procurement in the procurement file. Assistance Listing Number 93.323 • For one of two procurements, the County did not maintain evidence of the suspension and debarment check before entering into the covered transaction or evidence of the review and approval of the verification check. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition and other general procurement standards, as applicable. Also, noncompliance results in procurement transactions with potentially suspended or debarred entities. Repeat Finding: This audit finding was reported in the prior year in finding 2022-004. Recommendation: We recommend the County design controls to ensure compliance with federal procurement and suspension and debarment regulation and its purchasing policy and suspension and debarment verification procedures. We recommend the County develop standard justification forms with approval of the noncompetitive procurement documented on the forms and the forms maintained in the procurement file. Also, we recommend the County update its purchasing policy to ensure clear, concise, and detailed suspension and debarment verification procedures. Views of responsible officials: There is no disagreement from responsible officials
Criteria or specific requirement: According to § 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.318 General procurement standards of 2 CFR Part 200, the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. According to § 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a federal financial assistance award exceeds the SAT, or a lower threshold established by a nonfederal entity, formal procurement methods are required. According to § 180.300 of Subpart C - Responsibilities of Participants Regarding Transactions Doing Business With Other Persons of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. According to Section 3.4 Formal Solicitations of the County's Purchasing Policy, Purchases of goods and services with an estimated cost of $25,000 or more (including tax, installation, and freight), shall be made as the result of a Formal Solicitation process including but not limited to Invitations for Bids, Requests for Proposals, Requests for Qualifications, Requests for Information and any other formal solicitation method that can be completed within a timeframe that allows for the solicitation, evaluation and approval in accordance with this Section. Formal solicitations may be solicited through Purchasing’s web based system or as otherwise directed by the Purchasing Agent. According to Section 3.5 Exceptions to Competitive Solicitation of the County's Purchasing Policy, in certain circumstances competitive solicitations may not be the most cost-effective approach for procurement. The Board of Supervisors, County Executive, or Purchasing may waive requirements for competitive solicitations in accordance with the grounds permitted by law. Key exemption categories are identified in the Purchasing Policy. Exceptions are not intended to circumvent the competitive process and related County policies and does not eliminate the need to ensure purchases are competitively priced and the terms and conditions of the purchase are in the best interests of the County. A written determination of the basis for the exception to competitive solicitation and the reason for the selection of the particular source shall be included in Purchasing’s records. According to the County's suspension and debarment verification process, prior to entering into an applicable contract or subrecipient agreement, department will verify on SAM.gov if an entity is listed as suspended or debarred. Condition: The County did not follow federal procurement and suspension and debarment regulation nor its purchasing policy and suspension and debarment verification procedures. Questioned costs: None Context: During our testing, we noted the following matters related to procurement and suspension and debarment. Assistance Listing Number 21.027 • For one of eleven procurements, there is no written justification, documentary support, nor evidence of approval of the emergency procurement in the procurement file. Assistance Listing Number 93.323 • For one of two procurements, the County did not maintain evidence of the suspension and debarment check before entering into the covered transaction or evidence of the review and approval of the verification check. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition and other general procurement standards, as applicable. Also, noncompliance results in procurement transactions with potentially suspended or debarred entities. Repeat Finding: This audit finding was reported in the prior year in finding 2022-004. Recommendation: We recommend the County design controls to ensure compliance with federal procurement and suspension and debarment regulation and its purchasing policy and suspension and debarment verification procedures. We recommend the County develop standard justification forms with approval of the noncompetitive procurement documented on the forms and the forms maintained in the procurement file. Also, we recommend the County update its purchasing policy to ensure clear, concise, and detailed suspension and debarment verification procedures. Views of responsible officials: There is no disagreement from responsible officials
Criteria or specific requirement: According to § 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.318 General procurement standards of 2 CFR Part 200, the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. According to § 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a federal financial assistance award exceeds the SAT, or a lower threshold established by a nonfederal entity, formal procurement methods are required. According to § 180.300 of Subpart C - Responsibilities of Participants Regarding Transactions Doing Business With Other Persons of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. According to Section 3.4 Formal Solicitations of the County's Purchasing Policy, Purchases of goods and services with an estimated cost of $25,000 or more (including tax, installation, and freight), shall be made as the result of a Formal Solicitation process including but not limited to Invitations for Bids, Requests for Proposals, Requests for Qualifications, Requests for Information and any other formal solicitation method that can be completed within a timeframe that allows for the solicitation, evaluation and approval in accordance with this Section. Formal solicitations may be solicited through Purchasing’s web based system or as otherwise directed by the Purchasing Agent. According to Section 3.5 Exceptions to Competitive Solicitation of the County's Purchasing Policy, in certain circumstances competitive solicitations may not be the most cost-effective approach for procurement. The Board of Supervisors, County Executive, or Purchasing may waive requirements for competitive solicitations in accordance with the grounds permitted by law. Key exemption categories are identified in the Purchasing Policy. Exceptions are not intended to circumvent the competitive process and related County policies and does not eliminate the need to ensure purchases are competitively priced and the terms and conditions of the purchase are in the best interests of the County. A written determination of the basis for the exception to competitive solicitation and the reason for the selection of the particular source shall be included in Purchasing’s records. According to the County's suspension and debarment verification process, prior to entering into an applicable contract or subrecipient agreement, department will verify on SAM.gov if an entity is listed as suspended or debarred. Condition: The County did not follow federal procurement and suspension and debarment regulation nor its purchasing policy and suspension and debarment verification procedures. Questioned costs: None Context: During our testing, we noted the following matters related to procurement and suspension and debarment. Assistance Listing Number 21.027 • For one of eleven procurements, there is no written justification, documentary support, nor evidence of approval of the emergency procurement in the procurement file. Assistance Listing Number 93.323 • For one of two procurements, the County did not maintain evidence of the suspension and debarment check before entering into the covered transaction or evidence of the review and approval of the verification check. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition and other general procurement standards, as applicable. Also, noncompliance results in procurement transactions with potentially suspended or debarred entities. Repeat Finding: This audit finding was reported in the prior year in finding 2022-004. Recommendation: We recommend the County design controls to ensure compliance with federal procurement and suspension and debarment regulation and its purchasing policy and suspension and debarment verification procedures. We recommend the County develop standard justification forms with approval of the noncompetitive procurement documented on the forms and the forms maintained in the procurement file. Also, we recommend the County update its purchasing policy to ensure clear, concise, and detailed suspension and debarment verification procedures. Views of responsible officials: There is no disagreement from responsible officials
Criteria or specific requirement: According to § 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.318 General procurement standards of 2 CFR Part 200, the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. According to § 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a federal financial assistance award exceeds the SAT, or a lower threshold established by a nonfederal entity, formal procurement methods are required. According to § 180.300 of Subpart C - Responsibilities of Participants Regarding Transactions Doing Business With Other Persons of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. According to Section 3.4 Formal Solicitations of the County's Purchasing Policy, Purchases of goods and services with an estimated cost of $25,000 or more (including tax, installation, and freight), shall be made as the result of a Formal Solicitation process including but not limited to Invitations for Bids, Requests for Proposals, Requests for Qualifications, Requests for Information and any other formal solicitation method that can be completed within a timeframe that allows for the solicitation, evaluation and approval in accordance with this Section. Formal solicitations may be solicited through Purchasing’s web based system or as otherwise directed by the Purchasing Agent. According to Section 3.5 Exceptions to Competitive Solicitation of the County's Purchasing Policy, in certain circumstances competitive solicitations may not be the most cost-effective approach for procurement. The Board of Supervisors, County Executive, or Purchasing may waive requirements for competitive solicitations in accordance with the grounds permitted by law. Key exemption categories are identified in the Purchasing Policy. Exceptions are not intended to circumvent the competitive process and related County policies and does not eliminate the need to ensure purchases are competitively priced and the terms and conditions of the purchase are in the best interests of the County. A written determination of the basis for the exception to competitive solicitation and the reason for the selection of the particular source shall be included in Purchasing’s records. According to the County's suspension and debarment verification process, prior to entering into an applicable contract or subrecipient agreement, department will verify on SAM.gov if an entity is listed as suspended or debarred. Condition: The County did not follow federal procurement and suspension and debarment regulation nor its purchasing policy and suspension and debarment verification procedures. Questioned costs: None Context: During our testing, we noted the following matters related to procurement and suspension and debarment. Assistance Listing Number 21.027 • For one of eleven procurements, there is no written justification, documentary support, nor evidence of approval of the emergency procurement in the procurement file. Assistance Listing Number 93.323 • For one of two procurements, the County did not maintain evidence of the suspension and debarment check before entering into the covered transaction or evidence of the review and approval of the verification check. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition and other general procurement standards, as applicable. Also, noncompliance results in procurement transactions with potentially suspended or debarred entities. Repeat Finding: This audit finding was reported in the prior year in finding 2022-004. Recommendation: We recommend the County design controls to ensure compliance with federal procurement and suspension and debarment regulation and its purchasing policy and suspension and debarment verification procedures. We recommend the County develop standard justification forms with approval of the noncompetitive procurement documented on the forms and the forms maintained in the procurement file. Also, we recommend the County update its purchasing policy to ensure clear, concise, and detailed suspension and debarment verification procedures. Views of responsible officials: There is no disagreement from responsible officials
Finding – Internal control deficiencies over procurement requirements Identification of the Federal Program: Assistance Listing Number and Title: 14.231, Emergency Solutions Grant Coronavirus Program Federal Grantor Name: U.S. Department of Housing and Urban Development Federal Award/Contract Number: NA Pass-through Entity Name: California Department of Housing and Community Development Pass-through Award/Contract Number: 20-ESGCV-3-00002 Compliance Requirement – Procurement and Suspension and Debarment Condition: The City did not comply with 2 CFR 200.320 or with City procurement policies. The City did not obtain quotes for vehicles purchased. Criteria: Grant recipients must comply with Uniform Guidance for procurement, specifically with 2 CFR sections 200.318 thru 200.326 including ensuring the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320(a)(1) and (2). Cause: The City did not have proper internal control over the procurement requirements of this federal program. Effect: The City is out of compliance with procurement requirements. Questioned Costs: $199,274 Context: A small purchase could have been applied as the total amount spent under the contract was more than the micro-purchase amount but less than the simplified acquisition threshold. Under small purchase procedures price or rate quotes must be obtained. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that the City establish and maintain effective internal control ensuring an understanding of procurement compliance requirements prior to entering into contracts with vendors with the intention of using grant monies. Views of responsible officials: Management concurs with the finding.
Federal Program Information: COVID – Coronavirus State and Local Fiscal Recovery Funds (ALN #21.027) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Procurement: The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of 2 CFR 200.318, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. Condition: The College did not have a formal procurement policy in place documenting procedures that conform to the procurement standards in the Uniform Guidance. Cause: Lack of administrative oversight with respect to procurement process. Effect or Potential Effect: The College is not in compliance with procurement standards. Questioned Costs: None. Context: The College did not have a formal procurement policy in place documenting procedures that conform to the procurement standards in the Uniform Guidance. Identification as a Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the College develop and implement a procurement policy conforming to procurement standards. Views of Responsible Officials:
2023 – 002 Federal Agency: U.S Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555 Federal Award Identification Number and Year: 212WI063N1199, 222WI063N1199; 2022 and 2023 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2021-454515-NSL-547 Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: Uniform Guidance requires grant recipients implement and apply procurement policies that align with the requirements outlined in 2 CFR part 200.318-320, including the selection of vendors based on the identified informal and formal procurement methods, referred to as micro-purchases, small purchases, sealed bids, proposals and when noncompetitive procurement methods may be applied. The grant recipients are also required to design and implement an internal control structure to ensure compliance with procurement standards identified in 2 CFR Part 200.318-320 are complied with and necessary documentation retained. Condition: During our evaluation of the District's procurement policies in effect for the year under audit, it was noted that the policy in force for part of the year did not identify the correct thresholds for the selection of vendors in informal procurement methods, micro-purchases and small purchase. The policy was update during the year to comply with such requirements. Questioned costs: None. Context: The District's purchasing policy updated during the year to comply the thresholds in Uniform Guidance and to required retention of documentation of these evaluations. Prior to this update, the District's purchasing policy was had not been updated for several years and did not include all necessary aspects to comply with Uniform Guidance. Cause: The District did not complete its review and updating of the procurement prior to the beginning of year and the initiation of current contracts. Effect: The District's purchasing policy in effect during part of the year under audit did not fully comply with the requirements of the Uniform Guidance related to the use of informal procurement methods, micro-purchase and small purchase transactions. Repeat finding: This is a repeat of finding 2022-002. Recommendation: We recommend the District should review and update, as necessary, policies to ensure they fully comply with Uniform Guidance and any other applicable requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 002 Federal Agency: U.S Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555 Federal Award Identification Number and Year: 212WI063N1199, 222WI063N1199; 2022 and 2023 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2021-454515-NSL-547 Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: Uniform Guidance requires grant recipients implement and apply procurement policies that align with the requirements outlined in 2 CFR part 200.318-320, including the selection of vendors based on the identified informal and formal procurement methods, referred to as micro-purchases, small purchases, sealed bids, proposals and when noncompetitive procurement methods may be applied. The grant recipients are also required to design and implement an internal control structure to ensure compliance with procurement standards identified in 2 CFR Part 200.318-320 are complied with and necessary documentation retained. Condition: During our evaluation of the District's procurement policies in effect for the year under audit, it was noted that the policy in force for part of the year did not identify the correct thresholds for the selection of vendors in informal procurement methods, micro-purchases and small purchase. The policy was update during the year to comply with such requirements. Questioned costs: None. Context: The District's purchasing policy updated during the year to comply the thresholds in Uniform Guidance and to required retention of documentation of these evaluations. Prior to this update, the District's purchasing policy was had not been updated for several years and did not include all necessary aspects to comply with Uniform Guidance. Cause: The District did not complete its review and updating of the procurement prior to the beginning of year and the initiation of current contracts. Effect: The District's purchasing policy in effect during part of the year under audit did not fully comply with the requirements of the Uniform Guidance related to the use of informal procurement methods, micro-purchase and small purchase transactions. Repeat finding: This is a repeat of finding 2022-002. Recommendation: We recommend the District should review and update, as necessary, policies to ensure they fully comply with Uniform Guidance and any other applicable requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023 – 002 Federal Agency: U.S Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555 Federal Award Identification Number and Year: 212WI063N1199, 222WI063N1199; 2022 and 2023 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2021-454515-NSL-547 Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or specific requirement: Uniform Guidance requires grant recipients implement and apply procurement policies that align with the requirements outlined in 2 CFR part 200.318-320, including the selection of vendors based on the identified informal and formal procurement methods, referred to as micro-purchases, small purchases, sealed bids, proposals and when noncompetitive procurement methods may be applied. The grant recipients are also required to design and implement an internal control structure to ensure compliance with procurement standards identified in 2 CFR Part 200.318-320 are complied with and necessary documentation retained. Condition: During our evaluation of the District's procurement policies in effect for the year under audit, it was noted that the policy in force for part of the year did not identify the correct thresholds for the selection of vendors in informal procurement methods, micro-purchases and small purchase. The policy was update during the year to comply with such requirements. Questioned costs: None. Context: The District's purchasing policy updated during the year to comply the thresholds in Uniform Guidance and to required retention of documentation of these evaluations. Prior to this update, the District's purchasing policy was had not been updated for several years and did not include all necessary aspects to comply with Uniform Guidance. Cause: The District did not complete its review and updating of the procurement prior to the beginning of year and the initiation of current contracts. Effect: The District's purchasing policy in effect during part of the year under audit did not fully comply with the requirements of the Uniform Guidance related to the use of informal procurement methods, micro-purchase and small purchase transactions. Repeat finding: This is a repeat of finding 2022-002. Recommendation: We recommend the District should review and update, as necessary, policies to ensure they fully comply with Uniform Guidance and any other applicable requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-004 - Procurement, Suspension, and Debarment – Internal Control over Procurement and Verification Against the System for Award Management (“SAM”) (Significant Deficiency) Identification of the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number(s) and Award Year: B-21-MC-06-0554 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). In accordance with OMB Uniform Guidance, entities under the program, including subrecipients of a state, must follow the procurement standards in 2 CFR sections § 200.318 through § 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. C.F.R. § 200.319 prescribes that 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. Further, the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period. Condition: Community Development Block Grants-Entitlement Grants Cluster Based on the City’s formal purchasing policy, purchase orders are required to initiate purchases from procured vendors for transactions above $5,000. During our audit, we noted that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. Coronavirus State and Local Fiscal Recovery Funds We determined that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. During our audit, we also noted that there was no supporting document to indicate that the City verified the vendor against the SAM to ensure the vendor was not suspended or debarred from federally-funded programs before the contract was entered into. Cause: The City did not follow its policies and process in place to check and ensure the suspension and debarment review process over vendors that provides goods or services to the City’s programs was conducted prior to enter into contract. The City implemented necessary procedures to address the finding discovered during the audit for the year ended June 30,2022 prospectively, however, due to the timing of the previous audit, the City was not able to address for the year ended June 30, 2023. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-004. Recommendation: We recommended the City follow internal control policies and procedures to incorporate the suspension and debarment verification prior to awarding contracts. Views of Responsible Officials: Management concurs the finding.
2023-004 - Procurement, Suspension, and Debarment – Internal Control over Procurement and Verification Against the System for Award Management (“SAM”) (Significant Deficiency) Identification of the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number(s) and Award Year: B-21-MC-06-0554 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). In accordance with OMB Uniform Guidance, entities under the program, including subrecipients of a state, must follow the procurement standards in 2 CFR sections § 200.318 through § 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. C.F.R. § 200.319 prescribes that 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. Further, the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period. Condition: Community Development Block Grants-Entitlement Grants Cluster Based on the City’s formal purchasing policy, purchase orders are required to initiate purchases from procured vendors for transactions above $5,000. During our audit, we noted that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. Coronavirus State and Local Fiscal Recovery Funds We determined that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. During our audit, we also noted that there was no supporting document to indicate that the City verified the vendor against the SAM to ensure the vendor was not suspended or debarred from federally-funded programs before the contract was entered into. Cause: The City did not follow its policies and process in place to check and ensure the suspension and debarment review process over vendors that provides goods or services to the City’s programs was conducted prior to enter into contract. The City implemented necessary procedures to address the finding discovered during the audit for the year ended June 30,2022 prospectively, however, due to the timing of the previous audit, the City was not able to address for the year ended June 30, 2023. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-004. Recommendation: We recommended the City follow internal control policies and procedures to incorporate the suspension and debarment verification prior to awarding contracts. Views of Responsible Officials: Management concurs the finding.
2023-004 - Procurement, Suspension, and Debarment – Internal Control over Procurement and Verification Against the System for Award Management (“SAM”) (Significant Deficiency) Identification of the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number(s) and Award Year: B-21-MC-06-0554 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). In accordance with OMB Uniform Guidance, entities under the program, including subrecipients of a state, must follow the procurement standards in 2 CFR sections § 200.318 through § 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. C.F.R. § 200.319 prescribes that 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. Further, the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period. Condition: Community Development Block Grants-Entitlement Grants Cluster Based on the City’s formal purchasing policy, purchase orders are required to initiate purchases from procured vendors for transactions above $5,000. During our audit, we noted that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. Coronavirus State and Local Fiscal Recovery Funds We determined that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. During our audit, we also noted that there was no supporting document to indicate that the City verified the vendor against the SAM to ensure the vendor was not suspended or debarred from federally-funded programs before the contract was entered into. Cause: The City did not follow its policies and process in place to check and ensure the suspension and debarment review process over vendors that provides goods or services to the City’s programs was conducted prior to enter into contract. The City implemented necessary procedures to address the finding discovered during the audit for the year ended June 30,2022 prospectively, however, due to the timing of the previous audit, the City was not able to address for the year ended June 30, 2023. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-004. Recommendation: We recommended the City follow internal control policies and procedures to incorporate the suspension and debarment verification prior to awarding contracts. Views of Responsible Officials: Management concurs the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Housing and Urban Development ‐ CFDA #14.267 Continuum of Care Program Applicable Federal Award Number and Year – AZ0089L9T022114, AZ0170L9T022106, AZ0170L9T022005, AZ0132L9T022109, AZ0132L9T022008, AZ0192L9T022003, AZ0192L9T022104, AZ0090L9T022013 ‐ 2023 / 2022 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: During our testing, we identified that the Organization was not following their procurement policy. The Organization’s procurement policy is to obtain a minimum of 3 written bids for purchases greater than $10,000. The Organization selected an approved GSA vendor as allowed by Uniform Guidance; however, the Organization didn’t obtain any written bids as required by their procurement policy. Cause: Due to a lack of understanding of the procurement policy, the Organization did not obtain 3 written bids. Effect: The Organization did not comply with their procurement policy. Questioned Costs: None reported. Context/Sampling: A non‐statistical sample of 2 expenditures were selected for testing. For 1 out of the 2 transactions selected, the Organization did not obtain 3 written bids as required by the procurement policy. Repeat Finding from Prior Year: No Recommendation: We recommend that the Organization implement internal controls to ensure the procurement policy is followed or update the procurement policy to follow the Organization’s current practice. Views of Responsible Officials: Management agrees with the finding.