2023-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR section 200.318, a grantee meet general procurement standards which include maintaining records to document the history of procurements. Furthermore, the pass-through agency’s requirements for sole source procurements include a requirement that the procurement officer must determine in writing that only one “practicable source” exists and record the reasoning. Condition: Two vendors were awarded a contract through a sole source procurement without a written determination that only one practicable source existed and the reasoning for such a determination. Cause: The School was unaware of the documentation requirements. Effect: The Town is not in compliance with Federal and State procurement requirements. Questioned Costs: $28,025 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to include in its procurement files a written determination for all sole source procurements. Views of Responsible Official: Management agrees with the finding.
2023-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR section 200.318, a grantee meet general procurement standards which include maintaining records to document the history of procurements. Furthermore, the pass-through agency’s requirements for sole source procurements include a requirement that the procurement officer must determine in writing that only one “practicable source” exists and record the reasoning. Condition: Two vendors were awarded a contract through a sole source procurement without a written determination that only one practicable source existed and the reasoning for such a determination. Cause: The School was unaware of the documentation requirements. Effect: The Town is not in compliance with Federal and State procurement requirements. Questioned Costs: $28,025 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to include in its procurement files a written determination for all sole source procurements. Views of Responsible Official: Management agrees with the finding.
2023-002 U.S. Department of Education Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR section 200.318, a grantee meet general procurement standards which include maintaining records to document the history of procurements. Furthermore, the pass-through agency’s requirements for sole source procurements include a requirement that the procurement officer must determine in writing that only one “practicable source” exists and record the reasoning. Condition: Two vendors were awarded a contract through a sole source procurement without a written determination that only one practicable source existed and the reasoning for such a determination. Cause: The School was unaware of the documentation requirements. Effect: The Town is not in compliance with Federal and State procurement requirements. Questioned Costs: $28,025 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to include in its procurement files a written determination for all sole source procurements. Views of Responsible Official: Management agrees with the finding.
Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number: SLFRP0128 Grant Year: 2021 Assistance Listing Number: 21.027 Pass-Through Agency: State of Connecticut Office of Policy and Management Pass-Through Number(s): 12060-OPM20600-29669 Award Period: June 7, 2021, through December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The City must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Cities procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Policies regarding verification of compliance with suspension and debarment requirements were not found. Questioned Costs: None Context: Although the City did not have a policy in place in conformity with the federal Uniform Guidance criteria the population of expenditures requiring testing were immaterial or otherwise excluded from testing requirements. Effect: With the absence of a compliant policy, the City could process transactions that do not follow federal Uniform Guidance procurement standards. Repeat Finding: Yes, 2022-004 Cause: The City was in the process of updating their policy to be in line with the Uniform Guidance procurement standards, but was unable to finalize the policy prior to incurring allowable costs. Recommendation: We recommend the City comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Views of Responsible Officials: Management agrees with the auditors’ recommendations.
Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number: SLFRP0128 Grant Year: 2021 Assistance Listing Number: 21.027 Pass-Through Agency: State of Connecticut Office of Policy and Management Pass-Through Number(s): 12060-OPM20600-29669 Award Period: June 7, 2021, through December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The City must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Cities procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Policies regarding verification of compliance with suspension and debarment requirements were not found. Questioned Costs: None Context: Although the City did not have a policy in place in conformity with the federal Uniform Guidance criteria the population of expenditures requiring testing were immaterial or otherwise excluded from testing requirements. Effect: With the absence of a compliant policy, the City could process transactions that do not follow federal Uniform Guidance procurement standards. Repeat Finding: Yes, 2022-004 Cause: The City was in the process of updating their policy to be in line with the Uniform Guidance procurement standards, but was unable to finalize the policy prior to incurring allowable costs. Recommendation: We recommend the City comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Views of Responsible Officials: Management agrees with the auditors’ recommendations.
Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number: SLFRP0128 Grant Year: 2021 Assistance Listing Number: 21.027 Pass-Through Agency: State of Connecticut Office of Policy and Management Pass-Through Number(s): 12060-OPM20600-29669 Award Period: June 7, 2021, through December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The City must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Cities procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Policies regarding verification of compliance with suspension and debarment requirements were not found. Questioned Costs: None Context: Although the City did not have a policy in place in conformity with the federal Uniform Guidance criteria the population of expenditures requiring testing were immaterial or otherwise excluded from testing requirements. Effect: With the absence of a compliant policy, the City could process transactions that do not follow federal Uniform Guidance procurement standards. Repeat Finding: Yes, 2022-004 Cause: The City was in the process of updating their policy to be in line with the Uniform Guidance procurement standards, but was unable to finalize the policy prior to incurring allowable costs. Recommendation: We recommend the City comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Views of Responsible Officials: Management agrees with the auditors’ recommendations.
Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number: SLFRP0128 Grant Year: 2021 Assistance Listing Number: 21.027 Pass-Through Agency: State of Connecticut Office of Policy and Management Pass-Through Number(s): 12060-OPM20600-29669 Award Period: June 7, 2021, through December 31, 2026 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The City must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Cities procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Policies regarding verification of compliance with suspension and debarment requirements were not found. Questioned Costs: None Context: Although the City did not have a policy in place in conformity with the federal Uniform Guidance criteria the population of expenditures requiring testing were immaterial or otherwise excluded from testing requirements. Effect: With the absence of a compliant policy, the City could process transactions that do not follow federal Uniform Guidance procurement standards. Repeat Finding: Yes, 2022-004 Cause: The City was in the process of updating their policy to be in line with the Uniform Guidance procurement standards, but was unable to finalize the policy prior to incurring allowable costs. Recommendation: We recommend the City comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance including the verification that an entity with which the City plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Views of Responsible Officials: Management agrees with the auditors’ recommendations.
Finding Type. Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance (Procurement and Suspension and Debarment) Program. Drinking Water State Revolving Fund Cluster (CFDA# 66.468); U.S. Department of Environmental Protection Agency; Passed through the Oregon Infrastructure Finance Authority of the Oregon Business Development Department; Project number S22008. Criteria. Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition. The District did not have documented procurement standards to comply with 2 CFR sections 200.318 through 200.326. Cause. The District was not aware that written policies were required for these areas in accordance with 2 CFR Part 200. Effect. As a result of this condition, the District did not fully comply with 2 CFR Part 200 applicable to the above noted grant. Questioned Costs. No costs have been questioned as a result of this finding. Recommendation. We recommend that the District develop a policy as soon as practical, but no later than the end of fiscal year 2024, to comply with 2 CFR sections 200.318 through 200.326. View of Responsible Officials. We agree with the recommendation and will develop procedures to comply with the Uniform Guidance applicable to grants.
CONDITION: The Moniteau School District contracted with a third-party vendor (Smart Solutions Technologies) for technology equipment (Smart Boards and Mobile Carts) for the District which 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 repeat finding (2022-001) from prior 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 Moniteau School District 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: $184,219 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. In addition, I am recommending that management contact the PA Department of Education, and explain the circumstances and oversight, and seek direction as to the allowability of this program cost in writing for their permanent files. 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 District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from ‘Associates in Counseling’. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance, and District Procurement Policy #626, regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: $82,119 CAUSE: The District utilized this vendor as they felt these professional services best fit the needs of the District. However, the additional procedures addressed in its Procurement Policy for Federal Programs (#626) which addresses the issue of noncompetitive procurement as outlined in Section 2 CFR 200.320(c’), were inadvertently not performed. RECOMMENDATION: I recommend that for all future purchases involving noncompetitive procurement, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626), and 2) Section 2 CFR 200.320(c) 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 District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from ‘Associates in Counseling’. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance, and District Procurement Policy #626, regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: $82,119 CAUSE: The District utilized this vendor as they felt these professional services best fit the needs of the District. However, the additional procedures addressed in its Procurement Policy for Federal Programs (#626) which addresses the issue of noncompetitive procurement as outlined in Section 2 CFR 200.320(c’), were inadvertently not performed. RECOMMENDATION: I recommend that for all future purchases involving noncompetitive procurement, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626), and 2) Section 2 CFR 200.320(c) 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 District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from ‘Associates in Counseling’. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance, and District Procurement Policy #626, regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: $82,119 CAUSE: The District utilized this vendor as they felt these professional services best fit the needs of the District. However, the additional procedures addressed in its Procurement Policy for Federal Programs (#626) which addresses the issue of noncompetitive procurement as outlined in Section 2 CFR 200.320(c’), were inadvertently not performed. RECOMMENDATION: I recommend that for all future purchases involving noncompetitive procurement, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626), and 2) Section 2 CFR 200.320(c) 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 District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from ‘Associates in Counseling’. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance, and District Procurement Policy #626, regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: $82,119 CAUSE: The District utilized this vendor as they felt these professional services best fit the needs of the District. However, the additional procedures addressed in its Procurement Policy for Federal Programs (#626) which addresses the issue of noncompetitive procurement as outlined in Section 2 CFR 200.320(c’), were inadvertently not performed. RECOMMENDATION: I recommend that for all future purchases involving noncompetitive procurement, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626), and 2) Section 2 CFR 200.320(c) 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).
MATERIAL WEAKNESSES 2023-001 - Procurement Policy Federal Program Information: Department of Environmental Protection: 66.468 / 66.483 Drinking Water State Revolving Fund Cluster Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.318 through 200.327. Condition: During audit procedures, it was identified that the Royalton Fire District did not have a procurement policy consistent with federal compliance standards. Cause: The District did not adopt a procurement policy consistent with federal regulations. Effect: By not having a compliant federal procurement policy, the District is at an increased risk for making unallowable purchases. Identification of Questioned Costs: None identified. Context: A review was conducted of the Distict’s procurement policy and the policy was not in compliance with Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District adopt a federal procurement policy that is consistent with Uniform Guidance. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the District.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCES OF NONCOMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – (FEDERAL ALN 10.553, 10.555, AND 10.559) 2023-004 Internal Control Over Compliance and Reportable Instances of Noncompliance With Federal Procurement, and Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires the Academy to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, and suspension and debarment requirements applicable to the child nutrition cluster federal programs. Condition – During our audit, we noted the Academy did not have sufficient controls in place resulting in material noncompliance within its child nutrition cluster federal programs to ensure compliance with federal procurement requirements related to methods of procurement and to assure that it was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – None. Context – For three of three vendors exceeding the micro-purchase threshold, the Academy did not follow Uniform Guidance requirements related to methods of procurement applicable to federal program expenditures. The Academy also did not have proper documentation of suspension and debarment requirements maintained for one of one vendor tested to ensure compliance with this requirement in the current year. These were not statistically valid samples. Repeat Finding – This is a current year finding. Cause – This was an oversight by academy personnel. Effect – Noncompliance with procurement, and suspension and debarment requirements could result in the Academy expending federal funds inappropriately or utilizing vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the Academy review its internal control procedures relating to procurement, and suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance for this area should include documentation of compliance with Uniform Guidance requirements related to methods of procurement. These controls should also include steps to ensure any vendor with which the Academy contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy will review procedures relating to procurement, and suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCES OF NONCOMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – (FEDERAL ALN 10.553, 10.555, AND 10.559) 2023-004 Internal Control Over Compliance and Reportable Instances of Noncompliance With Federal Procurement, and Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires the Academy to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, and suspension and debarment requirements applicable to the child nutrition cluster federal programs. Condition – During our audit, we noted the Academy did not have sufficient controls in place resulting in material noncompliance within its child nutrition cluster federal programs to ensure compliance with federal procurement requirements related to methods of procurement and to assure that it was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – None. Context – For three of three vendors exceeding the micro-purchase threshold, the Academy did not follow Uniform Guidance requirements related to methods of procurement applicable to federal program expenditures. The Academy also did not have proper documentation of suspension and debarment requirements maintained for one of one vendor tested to ensure compliance with this requirement in the current year. These were not statistically valid samples. Repeat Finding – This is a current year finding. Cause – This was an oversight by academy personnel. Effect – Noncompliance with procurement, and suspension and debarment requirements could result in the Academy expending federal funds inappropriately or utilizing vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the Academy review its internal control procedures relating to procurement, and suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance for this area should include documentation of compliance with Uniform Guidance requirements related to methods of procurement. These controls should also include steps to ensure any vendor with which the Academy contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy will review procedures relating to procurement, and suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCES OF NONCOMPLIANCE – U.S. DEPARTMENT OF AGRICULTURE, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, CHILD NUTRITION CLUSTER – (FEDERAL ALN 10.553, 10.555, AND 10.559) 2023-004 Internal Control Over Compliance and Reportable Instances of Noncompliance With Federal Procurement, and Suspension and Debarment Requirements Criteria – 2 CFR § 180 and 2 CFR § 200.318-327 requires the Academy to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, and suspension and debarment requirements applicable to the child nutrition cluster federal programs. Condition – During our audit, we noted the Academy did not have sufficient controls in place resulting in material noncompliance within its child nutrition cluster federal programs to ensure compliance with federal procurement requirements related to methods of procurement and to assure that it was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs – None. Context – For three of three vendors exceeding the micro-purchase threshold, the Academy did not follow Uniform Guidance requirements related to methods of procurement applicable to federal program expenditures. The Academy also did not have proper documentation of suspension and debarment requirements maintained for one of one vendor tested to ensure compliance with this requirement in the current year. These were not statistically valid samples. Repeat Finding – This is a current year finding. Cause – This was an oversight by academy personnel. Effect – Noncompliance with procurement, and suspension and debarment requirements could result in the Academy expending federal funds inappropriately or utilizing vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation – We recommend that the Academy review its internal control procedures relating to procurement, and suspension and debarment for the child nutrition cluster federal program. Internal controls over compliance for this area should include documentation of compliance with Uniform Guidance requirements related to methods of procurement. These controls should also include steps to ensure any vendor with which the Academy contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy will review procedures relating to procurement, and suspension and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The Academy has separately issued a Corrective Action Plan related to this finding.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from three (3) vendors - CJAWS, Inc., Edmentum, Inc., and SapphireK12, Inc. This is a repeat finding (2022-007) from the previous fiscal year for CJAWS, Inc. and Edmentum, Inc. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $33,498, Edmentum, Inc. - $19,190, SapphireK12, Inc. $26,651 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from three (3) vendors - CJAWS, Inc., Edmentum, Inc., and SapphireK12, Inc. This is a repeat finding (2022-007) from the previous fiscal year for CJAWS, Inc. and Edmentum, Inc. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $33,498, Edmentum, Inc. - $19,190, SapphireK12, Inc. $26,651 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from three (3) vendors - CJAWS, Inc., Edmentum, Inc., and SapphireK12, Inc. This is a repeat finding (2022-007) from the previous fiscal year for CJAWS, Inc. and Edmentum, Inc. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $33,498, Edmentum, Inc. - $19,190, SapphireK12, Inc. $26,651 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from three (3) vendors - CJAWS, Inc., Edmentum, Inc., and SapphireK12, Inc. This is a repeat finding (2022-007) from the previous fiscal year for CJAWS, Inc. and Edmentum, Inc. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $33,498, Edmentum, Inc. - $19,190, SapphireK12, Inc. $26,651 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from three (3) vendors - CJAWS, Inc., Edmentum, Inc., and SapphireK12, Inc. This is a repeat finding (2022-007) from the previous fiscal year for CJAWS, Inc. and Edmentum, Inc. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $33,498, Edmentum, Inc. - $19,190, SapphireK12, Inc. $26,651 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
Inadequate Records Retention (Procurement) Criteria: Per Federal regulations for general procurement standards (2 CFR § 200.318 (i)), non-Federal entity must maintain records sufficient to detail the history of the procurement process. These records will include but are not limited to, the following: Rationale for the method of procurement, selection or rejection, and the basis for the contract price. Condition: In our procurement testing for CSLFRF funding, the City was unable to provide evidence that demonstrates public notice was published according to (2 CFR § 200.320(b)) for 1 of the 5 projects selected. Questioned Costs: $0 Cause and Effect: Due to the City not having a centralized repository for procurement records, sufficient evidence was unable to verify that procurements provide full and open competition to potential bidders, as there was a lack of documentation related to the public notice for open bidding to occur. Recommendation: We recommend the City updates their procurement policies and procedures by centrally tracking procurement documents for up to five years. Centrally tracking documentation will help the City mitigate potential contractual and administrative issues related to procurement. Management Response: The Finance Director is initiating conversations with department heads regarding updating procurement policies and procedures. We are taking steps to ensure all procurement documents are stored centrally in order for these items to be readily available moving forward.
Section III - Federal Awards Findings and Questioned Costs MATERIAL WEAKNESSES 2023-001 - Procurement Policy Federal Program Information: Department of Environmental Protection: 66.458/66.482 Clean Water State Revolving Funds Cluster 21.027 Coronavirus State Local Fiscal Recovery Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.318 through 200.327. Condition: During audit procedures, it was identified that the Town of Van Buren did not have a procurement policy consistent with federal compliance standards. Cause: The District did not adopt a procurement policy consistent with federal regulations. Effect: By not having a compliant federal procurement policy, the Town is at an increased risk for making unallowable purchases. Identification of Questioned Costs: None identified. Context: A review was conducted of the Town’s procurement policy and the policy was not in compliance with Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Town adopt a federal procurement policy that is consistent with Uniform Guidance. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the District.
Section III - Federal Awards Findings and Questioned Costs MATERIAL WEAKNESSES 2023-001 - Procurement Policy Federal Program Information: Department of Environmental Protection: 66.458/66.482 Clean Water State Revolving Funds Cluster 21.027 Coronavirus State Local Fiscal Recovery Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.318 through 200.327. Condition: During audit procedures, it was identified that the Town of Van Buren did not have a procurement policy consistent with federal compliance standards. Cause: The District did not adopt a procurement policy consistent with federal regulations. Effect: By not having a compliant federal procurement policy, the Town is at an increased risk for making unallowable purchases. Identification of Questioned Costs: None identified. Context: A review was conducted of the Town’s procurement policy and the policy was not in compliance with Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Town adopt a federal procurement policy that is consistent with Uniform Guidance. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the District.
CONDITION: The Greensburg Salem School District contracted with a third-party vendor (Trinity Automated Solutions, Inc.) for the performance of a HVAC Upgrades 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. During the year ended June 30, 2023, as a result of a monitoring performed by the Pennsylvania Department of Education, it was decided the District would use local funds to pay for project costs previously recognized and charged to the Elementary and Secondary School Emergency Relief Fund (ESSER III) federal program. As a result, prior year revenues recognized had to be reclassified as unearned revenues and beginning fund balance/net position are restated. The district additionally reclassified the Trinity Project from a Federal purchase and will not submit it as an expenditure through the Federal ESSER funding for the 2023 fiscal year. Refer to Note 13 within the financial statements. 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 HVAC Upgrades 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. EFFECT: The Greensburg Salem School District 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 HVAC Upgrades construction project. Subsequent to the issuance of the prior year audit, the District decided to use local funds for the project instead of the federal funds previously recognized. As a result, beginning fund balance/net position had to be restated for the previously recognized federal revenue. IDENTIFICATION OF A REPEAT FINDING: This is a repeat finding from the immediate previous audit, 2022-001. RECOMMENDATION: Management of the School District should 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 complies with all applicable sections of the Uniform Guidance.
CONDITION: During my review of Aliquippa School District’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, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Saving Ourselves ($30,000), AGI Repair ($16,216), IXL ($19,218), Learning Systems Associates LLC ($25,425), AGC Education Inc. ($11,644), Apple ($163,505), Germ Solutions LLC ($160,070), Graham Security ($12,025), Curriculum Designers, Inc. ($27,875), RJ Rhodes Transit, Inc. ($24,845). 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 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 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: $490,823 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, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) 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, and 5) 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. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’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 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors –– Houghton Mifflin-Harcourt ($509,919), Beaver Valley Intermediate Unit ($419,826), and Smart Solutions ($449,303). 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 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) 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, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $1,379,048 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, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) 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, 5) 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, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’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, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Saving Ourselves ($30,000), AGI Repair ($16,216), IXL ($19,218), Learning Systems Associates LLC ($25,425), AGC Education Inc. ($11,644), Apple ($163,505), Germ Solutions LLC ($160,070), Graham Security ($12,025), Curriculum Designers, Inc. ($27,875), RJ Rhodes Transit, Inc. ($24,845). 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 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 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: $490,823 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, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) 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, and 5) 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. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’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 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors –– Houghton Mifflin-Harcourt ($509,919), Beaver Valley Intermediate Unit ($419,826), and Smart Solutions ($449,303). 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 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) 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, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $1,379,048 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, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) 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, 5) 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, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’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, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Saving Ourselves ($30,000), AGI Repair ($16,216), IXL ($19,218), Learning Systems Associates LLC ($25,425), AGC Education Inc. ($11,644), Apple ($163,505), Germ Solutions LLC ($160,070), Graham Security ($12,025), Curriculum Designers, Inc. ($27,875), RJ Rhodes Transit, Inc. ($24,845). 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 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 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: $490,823 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, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) 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, and 5) 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. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’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 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors –– Houghton Mifflin-Harcourt ($509,919), Beaver Valley Intermediate Unit ($419,826), and Smart Solutions ($449,303). 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 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) 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, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $1,379,048 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, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) 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, 5) 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, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’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, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Saving Ourselves ($30,000), AGI Repair ($16,216), IXL ($19,218), Learning Systems Associates LLC ($25,425), AGC Education Inc. ($11,644), Apple ($163,505), Germ Solutions LLC ($160,070), Graham Security ($12,025), Curriculum Designers, Inc. ($27,875), RJ Rhodes Transit, Inc. ($24,845). 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 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 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: $490,823 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, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) 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, and 5) 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. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’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 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors –– Houghton Mifflin-Harcourt ($509,919), Beaver Valley Intermediate Unit ($419,826), and Smart Solutions ($449,303). 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 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) 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, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $1,379,048 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, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) 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, 5) 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, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
Finding Number: 2023-003 Repeat Finding: Similar to prior year finding 2022-003 Program Name/Assistance Listing Title: Indian School Equalization, Special Education Cluster Assistance Listing Number: 15.042, 84.027 Federal Agency: U.S. Department of the Interior, U.S. Department of Education Federal Award Number: A22AV00792 Questioned Costs: None Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment Criteria: Under 2 CFR §215.43 the School is required to implement certain procurement policies that adhere to the minimum federal requirements as outlined in 2 CFR §215.44. 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 §§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 School did not always follow procurement standards as put forth in 2 CFR §200.318 through §200.326. Effect: Noncompliance with federal regulation that led to a qualified audit opinion over the listed federal programs as noted above. Cause: Management oversight. Context: For ten of 25 vendors within the Simplified Acquisition Threshold reviewed, the School did not maintain documentation that appropriate procurement procedures were performed. Recommendation: The School should review its procurement procedures to ensure that proper procurement procedures are performed documentation is maintained to support the procurement. Response: The School’s responses are presented in a separate document. Contact person: Dolores Silva, Chief Financial Officer
Finding Number: 2023-003 Repeat Finding: Similar to prior year finding 2022-003 Program Name/Assistance Listing Title: Indian School Equalization, Special Education Cluster Assistance Listing Number: 15.042, 84.027 Federal Agency: U.S. Department of the Interior, U.S. Department of Education Federal Award Number: A22AV00792 Questioned Costs: None Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment Criteria: Under 2 CFR §215.43 the School is required to implement certain procurement policies that adhere to the minimum federal requirements as outlined in 2 CFR §215.44. 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 §§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 School did not always follow procurement standards as put forth in 2 CFR §200.318 through §200.326. Effect: Noncompliance with federal regulation that led to a qualified audit opinion over the listed federal programs as noted above. Cause: Management oversight. Context: For ten of 25 vendors within the Simplified Acquisition Threshold reviewed, the School did not maintain documentation that appropriate procurement procedures were performed. Recommendation: The School should review its procurement procedures to ensure that proper procurement procedures are performed documentation is maintained to support the procurement. Response: The School’s responses are presented in a separate document. Contact person: Dolores Silva, Chief Financial Officer
Finding Number: 2023-004 Prior Year Finding: 2022-004 Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 – Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2022 – 6/30/2023) Compliance Requirement: Procurement Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or Specific Requirement: Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Per 2 CFR section 200.318, a non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. Per 2 CFR section 200.319, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and § 200.320. Per the Town’s purchasing policy, goods or services costing $10,000 or more must be purchased from the lowest responsive bidder meeting specifications after advertising for bids. Condition/Context: The Town failed to provide documentation supporting compliance with required procurement processes for goods or services exceeding $10,000 for four out of six vendors tested. This includes a lack of evidence on how these vendors were selected and whether the procurement process ensured full and open competition. Additionally, two vendors utilized by the police department did not undergo the general bidding process. Questioned Costs: Unknown. Cause: The Town’s internal controls were not sufficient to ensure that procurement policies were followed for purchases made for the program. Effect: Failure to adhere to procurement policies and procedures may result in obtaining goods or services under terms that are not in the best interest of the federal program. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-04. Recommendation: The Town should review and enhance controls and procedures to ensure that it follows procurement policy for all goods and services charged to the program and should ensure that all departments are subject to applicable controls, policies and procedures. Views of Responsible Officials: Management agrees with the finding.
FA 2023-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Numbers: 235GA324N1199 (Year: 2023), 225GA324N1099 (Year: 2023) Questioned Costs: $3,381 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were reviewed and approved and that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $1,981,179 were expended and reported on the Berrien County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Condition: A sample of 40 expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For 12 expenditures, evidence of review and approval was not reflected within the voucher package. • Two expenditures were not recorded in the correct fiscal year. Additionally, auditor reviewed 38 of these same expenditures to determine if procurement transactions complied with the School District’s procurement procedures and proper oversight was maintained to ensure that contractors were performing according to their contracts. The following deficiency was noted: • The School District could not provide evidence that an adequate number of rate or price quotations were obtained from qualified sources for three small purchase expenditures reviewed. Questioned Cost: Upon testing a sample of $73,322 in procurement transactions services expenditures, known questioned costs of $3,381 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $1,341,865 in procurement transactions, we project the likely questioned costs to be approximately $61,878. Cause: When discussing the issues noted with management, they stated that the new Director was unaware of these federal requirements. She did not maintain adequate documents due to being new in her position. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance related to the Child Nutrition Cluster. Failure to ensure that expenditures are appropriately approved and procedures to address procurement and suspension and debarment compliance requirements are implemented exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds for unallowable purposes and/or with unqualified vendors. In addition, this deficiency could lead to the return of funding associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to the Child Nutrition Cluster. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review and approval, required procurement methods are properly identified and followed, and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
FA 2023-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Numbers: 235GA324N1199 (Year: 2023), 225GA324N1099 (Year: 2023) Questioned Costs: $3,381 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were reviewed and approved and that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $1,981,179 were expended and reported on the Berrien County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Condition: A sample of 40 expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For 12 expenditures, evidence of review and approval was not reflected within the voucher package. • Two expenditures were not recorded in the correct fiscal year. Additionally, auditor reviewed 38 of these same expenditures to determine if procurement transactions complied with the School District’s procurement procedures and proper oversight was maintained to ensure that contractors were performing according to their contracts. The following deficiency was noted: • The School District could not provide evidence that an adequate number of rate or price quotations were obtained from qualified sources for three small purchase expenditures reviewed. Questioned Cost: Upon testing a sample of $73,322 in procurement transactions services expenditures, known questioned costs of $3,381 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $1,341,865 in procurement transactions, we project the likely questioned costs to be approximately $61,878. Cause: When discussing the issues noted with management, they stated that the new Director was unaware of these federal requirements. She did not maintain adequate documents due to being new in her position. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance related to the Child Nutrition Cluster. Failure to ensure that expenditures are appropriately approved and procedures to address procurement and suspension and debarment compliance requirements are implemented exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds for unallowable purposes and/or with unqualified vendors. In addition, this deficiency could lead to the return of funding associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to the Child Nutrition Cluster. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review and approval, required procurement methods are properly identified and followed, and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
Improve Controls and Documentation over Procurement Federal Agency: U.S. Department of the Treasury Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Fund AL Numbers: 21.027 Award Year: 2023 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding Compliance Internal Control over Compliance - Significant Deficiency 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. As governmental entities are also required to use the same state procurement policies and procedures for federal funds as for non-federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context There was no evidence to document support that disbursements properly followed the procurement process before payments for services were made to the vendor. Cause Weaknesses in the design and operation of controls. 2023-001 Improve Controls and Documentation over Procurement (Continued) Effect or Potential Effect Due to the weaknesses in internal controls noted above, there is a risk that procurements may be awarded to vendors in a manner that is not consistent with federal procurement requirements. Known questioned costs are reported below, calculated as all payments to the referenced vendor: AL Questioned Number(s) Name of Federal Program or Cluster Costs 21.027 COVID-19 - Coronavirus State and Local $237,888 Fiscal Recovery Funds Recommendation The Town should address the weaknesses in internal controls noted above in order to ensure that federal procurements are conducted in accordance with federal and state requirements. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Procurement Process COVID-19 – Epidemiology and Laboratory Capacity for Infectious Diseases (ELC), Assistance Listing #93.323; Passed through the Oklahoma State Department of Education (Fund 723) Compliance Requirement: Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance; Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award the provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. 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. Effective May 14, 2022, the non-Federal entity must ensure that all applicable programs comply with section 70914 of the Build America, Buy America (BABA) Act, including through incorporation of a Buy America preference in the terms and conditions of each award with an infrastructure project. Condition: A vendor that was funded by the ELC program had not gone through the procurement process as required by applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: The District has previously funded the vendor using state and local funds rather than federal funds for the past several years. The vendor’s service was identified that the use of the funds was an allowable activity and cost, but the vendor had not gone through the required procurement process for federally funded programs. Effect: The District is out of compliance with federal requirements regarding procurement and could be contracting with vendors that are not the most practical for the District. Context/Sampling: Both of the two vendors that met this scope in this program was tested so no sampling was necessary. Repeat Finding From Prior Year: No Questioned costs: Funds spent with this vendor in this program were $486,260. Recommendation: Control procedures should be implemented to ensure that all vendors that are paid with federal funds following the required procurement regulations and ensure federal updates are regularly made to ensure continued compliance with procurement requirements. Views of Responsible Officials: The District understands the importance of complying with federal procurement requirements and will ensure all staff involved with federal funds are informed of the procurement rules with the addition of the federal compliance procedures to our Fiscal Management Policy.
Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Catalog Number: 21.027 Federal Agency: U.S. Department of Treasury Category of Finding: Procurement and Suspension and Debarment Criteria: Pursuant to the Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI, Compliance Supplement May 2023, sections 3.2-I-1 through 3.2-I-3: 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. A non-Federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of in contracting, awarding contracts only to responsible contractors, and maintaining records to Cost-Reimbursement Contracts under the Federal Acquisition Regulation subcontracts, non-Federal entities receiving cost-reimbursement contracts under the FAR must comply with the clauses at 48 CFR section 52.244-2 (consent to subcontract), 52.244-5 (competition), 52.203-13 (code of business ethics), 52.203-16 (conflicts of interest), and 52.215.12 (cost or pricing data); and the terms and conditions of the contract. The FAR defines furnish the supplies or services (including construction) and the buyer to pay for them, entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract. It includes, but is not limited to, purchase orders, and changes and modifications to purchase orders. Condition: The City does not have a current official written policy for procurement and contracts conforming to applicable Federal statutes and the updated procurement requirements per 2 CFR part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The City's Conflict of Interest Code does not include the required language per the Uniform Guidance. Cause: Lack of formal policies and procedures over current required procurement standards and lack of internal controls and adequate staff training on effective requirements set forth by the Uniform Guidance over procurement. Effect or Potential Effect: Failure to document and retain evidence that procurement procedures were followed could result in the need to reimburse Federal funds. Questioned Cost: None Context: The City does not have an effective purchasing manual for city-wide use. The City-provided policy and procedure document establishing purchasing guidelines is for Finance Department use. We noted that this document was last updated on September 7, 2004 and does not contain the language required by the Uniform Guidance. We reviewed the City's current Conflict of Interest Code and purchasing policy and procedure document and noted no provisions containing the required language per the Uniform Guidance. Statistical Sampling Validity: Non-statistical sampling was performed in relation to this finding. Repeat of a Prior-Year Finding: Yes, 2019-014, 2021-006, and 2022-004 Recommendation: We recommend the City establish an official written policy for procurement and contracting and Conflict of Interest Code that are in line with the requirements of the Uniform Guidance. The policy should contain components for compliance with and references to Federal requirements, such as language establishing contract files that document significant procurement history; methods of procurement authorized including selection of contract type, contractor selection or rejection, and the basis of contract price; verification that procurements provide full and open competition when required; requirements for cost or price analysis, including for contract modifications; obtaining and reacting to suspension and debarment. The City should strengthen its procurement internal controls based on this official written policy. Management Response and Corrective Action Plan City's Response: Policy and Procedures manual was updated and approved by City Council on December 5, 2023 to include 2 CFR part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requirements. Corrective Action Plan: Update policies and procedures manual. Planned Implementation Date: December 5, 2023 Responsible Person: Director of Finance
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement. Specifically, §200.318 General procurement standards indicates “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” In addition, Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: A selection of procurements did not maintain sufficient documentation that detailed the history of the procurement and justification for using non-competitive practices. Questioned costs: Known questioned costs of $23,890. (NA21NMF4370552 = $4,650, NA22NMF4370355 = $12,440, NA22NMF4360330 = $6,800) Context: In a statistically valid sample, three of forty procurement selections tested, did not have sufficient documentation to justify their acquisition method. One item related to purchase decisions dictated by a subrecipient; however the payment was made directly by the Commission and no justification showing an adequate procurement process was provided by the subrecipient. Two selections related to procurements with a long-standing vendor which was used as the justification for selection, however no documentation was provided for the justification to continue using this vendor. Cause: Insufficient understanding and application of procurement policies when unusual situations arise. Effect: Noncompliance could lead the Commission to enter into contracts with vendors that are not the most suitable for the goods and/or services being procured. Repeat finding: Yes – see finding 2022-001 from the prior year. Recommendation: We recommend increased internal monitoring to ensure that noncompetitive procurements are sufficiently justified, and that internal Sole Source Justification Forms are completed correctly and retained for all vendors procured under noncompetitive methods. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement. Specifically, §200.318 General procurement standards indicates “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” In addition, Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: A selection of procurements did not maintain sufficient documentation that detailed the history of the procurement and justification for using non-competitive practices. Questioned costs: Known questioned costs of $23,890. (NA21NMF4370552 = $4,650, NA22NMF4370355 = $12,440, NA22NMF4360330 = $6,800) Context: In a statistically valid sample, three of forty procurement selections tested, did not have sufficient documentation to justify their acquisition method. One item related to purchase decisions dictated by a subrecipient; however the payment was made directly by the Commission and no justification showing an adequate procurement process was provided by the subrecipient. Two selections related to procurements with a long-standing vendor which was used as the justification for selection, however no documentation was provided for the justification to continue using this vendor. Cause: Insufficient understanding and application of procurement policies when unusual situations arise. Effect: Noncompliance could lead the Commission to enter into contracts with vendors that are not the most suitable for the goods and/or services being procured. Repeat finding: Yes – see finding 2022-001 from the prior year. Recommendation: We recommend increased internal monitoring to ensure that noncompetitive procurements are sufficiently justified, and that internal Sole Source Justification Forms are completed correctly and retained for all vendors procured under noncompetitive methods. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement. Specifically, §200.318 General procurement standards indicates “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” In addition, Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: A selection of procurements did not maintain sufficient documentation that detailed the history of the procurement and justification for using non-competitive practices. Questioned costs: Known questioned costs of $23,890. (NA21NMF4370552 = $4,650, NA22NMF4370355 = $12,440, NA22NMF4360330 = $6,800) Context: In a statistically valid sample, three of forty procurement selections tested, did not have sufficient documentation to justify their acquisition method. One item related to purchase decisions dictated by a subrecipient; however the payment was made directly by the Commission and no justification showing an adequate procurement process was provided by the subrecipient. Two selections related to procurements with a long-standing vendor which was used as the justification for selection, however no documentation was provided for the justification to continue using this vendor. Cause: Insufficient understanding and application of procurement policies when unusual situations arise. Effect: Noncompliance could lead the Commission to enter into contracts with vendors that are not the most suitable for the goods and/or services being procured. Repeat finding: Yes – see finding 2022-001 from the prior year. Recommendation: We recommend increased internal monitoring to ensure that noncompetitive procurements are sufficiently justified, and that internal Sole Source Justification Forms are completed correctly and retained for all vendors procured under noncompetitive methods. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement. Specifically, §200.318 General procurement standards indicates “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” In addition, Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: A selection of procurements did not maintain sufficient documentation that detailed the history of the procurement and justification for using non-competitive practices. Questioned costs: Known questioned costs of $23,890. (NA21NMF4370552 = $4,650, NA22NMF4370355 = $12,440, NA22NMF4360330 = $6,800) Context: In a statistically valid sample, three of forty procurement selections tested, did not have sufficient documentation to justify their acquisition method. One item related to purchase decisions dictated by a subrecipient; however the payment was made directly by the Commission and no justification showing an adequate procurement process was provided by the subrecipient. Two selections related to procurements with a long-standing vendor which was used as the justification for selection, however no documentation was provided for the justification to continue using this vendor. Cause: Insufficient understanding and application of procurement policies when unusual situations arise. Effect: Noncompliance could lead the Commission to enter into contracts with vendors that are not the most suitable for the goods and/or services being procured. Repeat finding: Yes – see finding 2022-001 from the prior year. Recommendation: We recommend increased internal monitoring to ensure that noncompetitive procurements are sufficiently justified, and that internal Sole Source Justification Forms are completed correctly and retained for all vendors procured under noncompetitive methods. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement. Specifically, §200.318 General procurement standards indicates “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” In addition, Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: A selection of procurements did not maintain sufficient documentation that detailed the history of the procurement and justification for using non-competitive practices. Questioned costs: Known questioned costs of $23,890. (NA21NMF4370552 = $4,650, NA22NMF4370355 = $12,440, NA22NMF4360330 = $6,800) Context: In a statistically valid sample, three of forty procurement selections tested, did not have sufficient documentation to justify their acquisition method. One item related to purchase decisions dictated by a subrecipient; however the payment was made directly by the Commission and no justification showing an adequate procurement process was provided by the subrecipient. Two selections related to procurements with a long-standing vendor which was used as the justification for selection, however no documentation was provided for the justification to continue using this vendor. Cause: Insufficient understanding and application of procurement policies when unusual situations arise. Effect: Noncompliance could lead the Commission to enter into contracts with vendors that are not the most suitable for the goods and/or services being procured. Repeat finding: Yes – see finding 2022-001 from the prior year. Recommendation: We recommend increased internal monitoring to ensure that noncompetitive procurements are sufficiently justified, and that internal Sole Source Justification Forms are completed correctly and retained for all vendors procured under noncompetitive methods. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement. Specifically, §200.318 General procurement standards indicates “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” In addition, Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: A selection of procurements did not maintain sufficient documentation that detailed the history of the procurement and justification for using non-competitive practices. Questioned costs: Known questioned costs of $23,890. (NA21NMF4370552 = $4,650, NA22NMF4370355 = $12,440, NA22NMF4360330 = $6,800) Context: In a statistically valid sample, three of forty procurement selections tested, did not have sufficient documentation to justify their acquisition method. One item related to purchase decisions dictated by a subrecipient; however the payment was made directly by the Commission and no justification showing an adequate procurement process was provided by the subrecipient. Two selections related to procurements with a long-standing vendor which was used as the justification for selection, however no documentation was provided for the justification to continue using this vendor. Cause: Insufficient understanding and application of procurement policies when unusual situations arise. Effect: Noncompliance could lead the Commission to enter into contracts with vendors that are not the most suitable for the goods and/or services being procured. Repeat finding: Yes – see finding 2022-001 from the prior year. Recommendation: We recommend increased internal monitoring to ensure that noncompetitive procurements are sufficiently justified, and that internal Sole Source Justification Forms are completed correctly and retained for all vendors procured under noncompetitive methods. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement. Specifically, §200.318 General procurement standards indicates “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” In addition, Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: A selection of procurements did not maintain sufficient documentation that detailed the history of the procurement and justification for using non-competitive practices. Questioned costs: Known questioned costs of $23,890. (NA21NMF4370552 = $4,650, NA22NMF4370355 = $12,440, NA22NMF4360330 = $6,800) Context: In a statistically valid sample, three of forty procurement selections tested, did not have sufficient documentation to justify their acquisition method. One item related to purchase decisions dictated by a subrecipient; however the payment was made directly by the Commission and no justification showing an adequate procurement process was provided by the subrecipient. Two selections related to procurements with a long-standing vendor which was used as the justification for selection, however no documentation was provided for the justification to continue using this vendor. Cause: Insufficient understanding and application of procurement policies when unusual situations arise. Effect: Noncompliance could lead the Commission to enter into contracts with vendors that are not the most suitable for the goods and/or services being procured. Repeat finding: Yes – see finding 2022-001 from the prior year. Recommendation: We recommend increased internal monitoring to ensure that noncompetitive procurements are sufficiently justified, and that internal Sole Source Justification Forms are completed correctly and retained for all vendors procured under noncompetitive methods. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement. Specifically, §200.318 General procurement standards indicates “the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” In addition, Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: A selection of procurements did not maintain sufficient documentation that detailed the history of the procurement and justification for using non-competitive practices. Questioned costs: Known questioned costs of $23,890. (NA21NMF4370552 = $4,650, NA22NMF4370355 = $12,440, NA22NMF4360330 = $6,800) Context: In a statistically valid sample, three of forty procurement selections tested, did not have sufficient documentation to justify their acquisition method. One item related to purchase decisions dictated by a subrecipient; however the payment was made directly by the Commission and no justification showing an adequate procurement process was provided by the subrecipient. Two selections related to procurements with a long-standing vendor which was used as the justification for selection, however no documentation was provided for the justification to continue using this vendor. Cause: Insufficient understanding and application of procurement policies when unusual situations arise. Effect: Noncompliance could lead the Commission to enter into contracts with vendors that are not the most suitable for the goods and/or services being procured. Repeat finding: Yes – see finding 2022-001 from the prior year. Recommendation: We recommend increased internal monitoring to ensure that noncompetitive procurements are sufficiently justified, and that internal Sole Source Justification Forms are completed correctly and retained for all vendors procured under noncompetitive methods. Views of responsible officials: There is no disagreement with the audit finding.