FINDING 2023-006 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2022, FY2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 24 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context A School Nutrition Cooperative (Co-ops, Education Service Center, Group Purchasing Organization, etc.) that would like to be classified as a School Food Authority (SFA) Cooperative must complete a questionnaire and submit it to the Indiana Department of Education (IDOE). Once a questionnaire is received, the IDOE will review the answers to determine a Cooperative's classification. Only Cooperatives that submit the questionnaire and receive an SFA-only Cooperative classification from the IDOE in writing, will be considered an SFA only Cooperative for the purposes of the procurement process and procurement reviews. When the value of goods or services exceeds the simplified acquisition threshold, the proper purchasing method would be the bidding process, unless the purchase meets certain other qualifications. Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. Two vendors were identified as falling within the small purchase threshold. Both vendors were selected for testing. Supporting documentation to show that an adequate number of price or rate quotations were obtained to ensure full and open competition could not be provided for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . INDIANA STATE BOARD OF ACCOUNTS 25 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (2) Small purchases – (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, procurement procedures for goods and services were not adhered to. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services. INDIANA STATE BOARD OF ACCOUNTS 26 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-006 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2022, FY2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 24 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context A School Nutrition Cooperative (Co-ops, Education Service Center, Group Purchasing Organization, etc.) that would like to be classified as a School Food Authority (SFA) Cooperative must complete a questionnaire and submit it to the Indiana Department of Education (IDOE). Once a questionnaire is received, the IDOE will review the answers to determine a Cooperative's classification. Only Cooperatives that submit the questionnaire and receive an SFA-only Cooperative classification from the IDOE in writing, will be considered an SFA only Cooperative for the purposes of the procurement process and procurement reviews. When the value of goods or services exceeds the simplified acquisition threshold, the proper purchasing method would be the bidding process, unless the purchase meets certain other qualifications. Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. Two vendors were identified as falling within the small purchase threshold. Both vendors were selected for testing. Supporting documentation to show that an adequate number of price or rate quotations were obtained to ensure full and open competition could not be provided for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . INDIANA STATE BOARD OF ACCOUNTS 25 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (2) Small purchases – (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, procurement procedures for goods and services were not adhered to. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services. INDIANA STATE BOARD OF ACCOUNTS 26 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-006 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY2022, FY2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 24 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context A School Nutrition Cooperative (Co-ops, Education Service Center, Group Purchasing Organization, etc.) that would like to be classified as a School Food Authority (SFA) Cooperative must complete a questionnaire and submit it to the Indiana Department of Education (IDOE). Once a questionnaire is received, the IDOE will review the answers to determine a Cooperative's classification. Only Cooperatives that submit the questionnaire and receive an SFA-only Cooperative classification from the IDOE in writing, will be considered an SFA only Cooperative for the purposes of the procurement process and procurement reviews. When the value of goods or services exceeds the simplified acquisition threshold, the proper purchasing method would be the bidding process, unless the purchase meets certain other qualifications. Federal regulations allow for informal procurement methods when the value of the procurement for goods or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. If it is determined a single source provider can be used for a small purchase, documentation must be retained supporting the determination. Two vendors were identified as falling within the small purchase threshold. Both vendors were selected for testing. Supporting documentation to show that an adequate number of price or rate quotations were obtained to ensure full and open competition could not be provided for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . INDIANA STATE BOARD OF ACCOUNTS 25 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (2) Small purchases – (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, procurement procedures for goods and services were not adhered to. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services. INDIANA STATE BOARD OF ACCOUNTS 26 SHENANDOAH SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Knott County Fiscal Court Did Not Maintain Proper FEMA Documentation Federal Program: Assistance Listing #97.036 FEMA Public Assistance Program Award Number and Year: FEMA-4663DRKYP00000001 2022 Name of Federal Agency and Pass-Thru Agency: U. S. Department of Homeland Security and State Department of Military Affairs Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Type of Finding: Material Weakness, Noncompliance Amount of Questioned Costs: $1,212,805 COVID Related: No Knott County had severe flooding in July of 2022. This event qualified Knott County Fiscal Court to receive federal funding to recover from the disaster. Paperwork is maintained to document and track work that is necessary and to determine the portion eligible for coverage by FEMA. The fiscal court did not maintain proper FEMA documentation. Out of 36 disbursements tested, 11 did not have any accompanying information that would detail the expected scope of work or cost. The 11 disbursements that did not have appropriate documentation totaled $1,212,805 in questioned cost. The fiscal court has not sufficiently overseen the expenditure of federal funds and did not prioritize the implementation of an effective internal control system. Tracking of the FEMA projects was consistently executed on completed projects but was not available for the in-progress projects that were tested. The lack of documentation to appropriately connect the disbursements to FEMA authorized work resulted in the determination that the county was not in compliance with the applicable attributes. An inaccurate implementation of controls and the lack of management oversight and involvement can cause noncompliance with federal requirements and jeopardize the fiscal court’s future funding. The lack of appropriate documentation also prevented the ability to rely on supplementary information, such as the Schedule of Expenditures of Federal Awards. 2 CFR part 200 Uniform Administrative Requirements, Cost Principles, And Audit Requirements For Federal Awards provides guidance on Federal regulations pertaining to Federal Awards. 2 CFR 200.306, regarding cost sharing or matching, states that any shared costs or matching funds must meet all of the following criteria: verifiable from the non-Federal entity’s records; not included as contributions for any other Federal award; necessary and reasonable for accomplishment of project or program objectives; allowable under subpart E of this part; not paid by the Federal Government under another Federal award except where allowed; provided for in the approved budget when required by the Federal awarding agency; and conform to other provisions of this part, as applicable. 2 CFR 200.318(i), regarding general procurement standards, requires Non-Federal entities to maintain records sufficient to detail the history of procurement. These records will 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. 2 CFR 200.329, concerning monitoring and reporting program performance, states that the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function, or activity. We recommend the Knott County Fiscal Court implement adequate internal controls to ensure federal compliance requirements are met. In addition, the fiscal court should maintain documentation for all project activity to effectively track work that is necessary and to determine the portion eligible for coverage under Federal programs.
Federal Agency: U.S. Department of Education Federal Program Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Numbers: 21.027 Federal Award Identification Number and Year: SLFRP2619, 2023 Pass-Through Agency: Minnesota Department of Education Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: Non-federal entities other than states must follow the procurement standards set out at c CFR sections 200.318 through 200.326. This includes utilizing one of the five allowable procurement methods, including small purchase guidelines for items over the micro-purchase threshold and sealed bids, competitive proposals, or noncompetitive proposals when items exceed the simplified acquisition threshold. In addition, the Uniform Guidance requires that the entity maintain records sufficient to detail the history of the procurement. Condition: During our testing of the District’s procurements within the State and Local Fiscal Recovery Funds program, it was noted that all three procurements tested did not have sufficient documentation recording the appropriate method and history of the transaction. Questioned Costs: None Context: The three procurements which were tested did not retain documentation detailing the procurement process or what quotes were obtained. Cause: Time pressure led to this requirement not being met. Effect: The District was not in compliance with the documentation requirements for procurement transactions as detailed in the Uniform Guidance. Repeat Finding: This is not a repeat finding from the prior year. Recommendation: We recommend that the District reviews its procedures and controls over procurement for the Coronavirus State and Local Fiscal Recovery Funds program to ensure it is following federal guidance and internal policies over the procurement process and documenting the appropriate method and history of the transaction. View of Responsible Official: There is no disagreement with the audit finding.
Finding 2023-007: Significant Deficiency, Procurement and Noncompliance Finding – Procurement – Internal Control over Procurement Assistance Listing Program Title and Number: Special Education Cluster (IDEA) 84.027 Federal Agency: Department of Education Pass-through Entity: N/A Award year: 2022 and 2023 Criteria or specific requirement: The City must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. Condition: SPED/Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases-Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. The DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, the City did not follow their own procurement policy requiring two quotes for a micro-purchase expenditure, three quotes for a small purchase expenditure and advertising for bids publicly for the large >$5,000 purchase expenditures. They only obtained one quote for each expenditure for micro and small purchases, and they did not use a public bid process for expenditures over $5,000. Cause: While the City has a formal policy around required bids, the thresholds had not been updated in several years and there was a lack of controls that ensured the City DPS procurement policy was being adhered to in order to be compliant with the compliance standards. Effect: Possible effects on the performance is centered around potentially not awarding the purchase to the lowest qualified bidder. Prevalence: Systemic in nature. Questioned Cost: None Repeat Finding: No Recommendation: We recommend that the City implement controls that require review of each expenditure to ensure the City obtained the adequate number of bids for each expenditure. Additionally, we recommend that the City update their procurement thresholds to be more consistent with the compliance thresholds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-007: Significant Deficiency, Procurement and Noncompliance Finding – Procurement – Internal Control over Procurement Assistance Listing Program Title and Number: Special Education Cluster (IDEA) 84.027 Federal Agency: Department of Education Pass-through Entity: N/A Award year: 2022 and 2023 Criteria or specific requirement: The City must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. Condition: SPED/Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases-Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. The DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, the City did not follow their own procurement policy requiring two quotes for a micro-purchase expenditure, three quotes for a small purchase expenditure and advertising for bids publicly for the large >$5,000 purchase expenditures. They only obtained one quote for each expenditure for micro and small purchases, and they did not use a public bid process for expenditures over $5,000. Cause: While the City has a formal policy around required bids, the thresholds had not been updated in several years and there was a lack of controls that ensured the City DPS procurement policy was being adhered to in order to be compliant with the compliance standards. Effect: Possible effects on the performance is centered around potentially not awarding the purchase to the lowest qualified bidder. Prevalence: Systemic in nature. Questioned Cost: None Repeat Finding: No Recommendation: We recommend that the City implement controls that require review of each expenditure to ensure the City obtained the adequate number of bids for each expenditure. Additionally, we recommend that the City update their procurement thresholds to be more consistent with the compliance thresholds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-007: Significant Deficiency, Procurement and Noncompliance Finding – Procurement – Internal Control over Procurement Assistance Listing Program Title and Number: Special Education Cluster (IDEA) 84.027 Federal Agency: Department of Education Pass-through Entity: N/A Award year: 2022 and 2023 Criteria or specific requirement: The City must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. Condition: SPED/Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases-Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. The DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, the City did not follow their own procurement policy requiring two quotes for a micro-purchase expenditure, three quotes for a small purchase expenditure and advertising for bids publicly for the large >$5,000 purchase expenditures. They only obtained one quote for each expenditure for micro and small purchases, and they did not use a public bid process for expenditures over $5,000. Cause: While the City has a formal policy around required bids, the thresholds had not been updated in several years and there was a lack of controls that ensured the City DPS procurement policy was being adhered to in order to be compliant with the compliance standards. Effect: Possible effects on the performance is centered around potentially not awarding the purchase to the lowest qualified bidder. Prevalence: Systemic in nature. Questioned Cost: None Repeat Finding: No Recommendation: We recommend that the City implement controls that require review of each expenditure to ensure the City obtained the adequate number of bids for each expenditure. Additionally, we recommend that the City update their procurement thresholds to be more consistent with the compliance thresholds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-007: Significant Deficiency, Procurement and Noncompliance Finding – Procurement – Internal Control over Procurement Assistance Listing Program Title and Number: Special Education Cluster (IDEA) 84.027 Federal Agency: Department of Education Pass-through Entity: N/A Award year: 2022 and 2023 Criteria or specific requirement: The City must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. Condition: SPED/Grant Administration did not adhere to the Danbury Public Schools “Bids and Purchases-Competitive” procurement policies, that were compliant with Federal Part 3 compliance guidelines. The DPS had a procurement policy in place that was consistent with the standards of the aforementioned compliance sections; however, the City did not follow their own procurement policy requiring two quotes for a micro-purchase expenditure, three quotes for a small purchase expenditure and advertising for bids publicly for the large >$5,000 purchase expenditures. They only obtained one quote for each expenditure for micro and small purchases, and they did not use a public bid process for expenditures over $5,000. Cause: While the City has a formal policy around required bids, the thresholds had not been updated in several years and there was a lack of controls that ensured the City DPS procurement policy was being adhered to in order to be compliant with the compliance standards. Effect: Possible effects on the performance is centered around potentially not awarding the purchase to the lowest qualified bidder. Prevalence: Systemic in nature. Questioned Cost: None Repeat Finding: No Recommendation: We recommend that the City implement controls that require review of each expenditure to ensure the City obtained the adequate number of bids for each expenditure. Additionally, we recommend that the City update their procurement thresholds to be more consistent with the compliance thresholds. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-001 – Special Education Cluster – AL No.’s 84.027 & 84.173 Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs 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. As governmental subrecipients of states 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: During fiscal year 2023, the Town did not comply with the required procurement policies and procedures process for procurements that exceeded both State and Federal thresholds. Questioned Costs: Unkown Cause: A Town State/Federal grants procedures manual that included proper procurement procedures did not exist until February 2023. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be in accordance with procurement, suspension, and debarment principles. No known questioned costs are reported, as it is not quantifiable. Identification as a Repeat Finding: Yes, finding number 2022-002 Recommendation: The Town should address the weaknesses in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Managements Response: We acknowledge the audit finding related to non-compliance with the required procurement policies and procedures for procurements exceeding the State and Federal thresholds during Fiscal Year 2023. The Town and Schools have Acushnet’s Federal Grant Procedures Manual (February 2023) to ensure that procurements are conducted in accordance with Federal and State requirements – in particular, the procurement standards set out at 2 CFR sections 200.318 through 200.326. We are pleased to report that we believe to have addressed this issue in Fiscal Year 2024 to ensure compliance with the procurement policies and procedures, as required by both State and Federal thresholds
Finding 2023-001 – Special Education Cluster – AL No.’s 84.027 & 84.173 Department of Education Massachusetts Department of Elementary and Secondary Education Noncompliance and Significant Deficiency Related to Internal Control over Compliance of the Major Programs 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. As governmental subrecipients of states 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: During fiscal year 2023, the Town did not comply with the required procurement policies and procedures process for procurements that exceeded both State and Federal thresholds. Questioned Costs: Unkown Cause: A Town State/Federal grants procedures manual that included proper procurement procedures did not exist until February 2023. Effect or Potential Effect: Due to the weaknesses in internal controls noted above, there is a risk that amounts charged to federal awards may not be in accordance with procurement, suspension, and debarment principles. No known questioned costs are reported, as it is not quantifiable. Identification as a Repeat Finding: Yes, finding number 2022-002 Recommendation: The Town should address the weaknesses in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Managements Response: We acknowledge the audit finding related to non-compliance with the required procurement policies and procedures for procurements exceeding the State and Federal thresholds during Fiscal Year 2023. The Town and Schools have Acushnet’s Federal Grant Procedures Manual (February 2023) to ensure that procurements are conducted in accordance with Federal and State requirements – in particular, the procurement standards set out at 2 CFR sections 200.318 through 200.326. We are pleased to report that we believe to have addressed this issue in Fiscal Year 2024 to ensure compliance with the procurement policies and procedures, as required by both State and Federal thresholds
Finding 2023-003 – COVID 19 – Coronavirus State and Local Fiscal Recovery Fund - AL No. 21.027 U.S. Department of Treasury Noncompliance and Material Weakness Related to Internal Control over Compliance of the Major Program Criteria: Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. As governmental subrecipients of states they 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. Condition: During fiscal year 2023, the Town could not provide evidence that they complied with the required procurement policies and procedures in place as it related to two of the expenses charged to the major program. Context: The Town purchased a new boiler for the School however the procurement documentation could not be located and the employee who would have overseen the project was unavailable to provide the supporting documentation. In addition, the Town could not locate or provide evidence that procurement procedures were followed when selecting an engineer for the Water Tank project. Questioned Costs: $71,500 related to the School Boiler Project and $170,163.70 related to the Water Tank Project. Cause: Directors used the Massachusetts procurement guidelines and not federal guidelines. Effect or Potential Effect: There is a risk that the amount charged to the federal awards major program may not be in accordance with procurement, suspension, and debarment principles. Identification as a Repeat Finding: N/A Recommendation: The Town of Hopedale should address the noncompliance and material weakness in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Management Response: New procedures in place for documentation and reporting.
2023-003 Documented Procurement Policy Federal Program - U.S. Department of the Treasury – Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal Award Number - SLFRP0136 Compliance Requirement - Procurement, Suspension, and Debarment Criteria - Per 2 C.F.R. § 200.318(a), non-federal entities must use documented procurement procedures that reflect applicable state and local laws and regulations and conform to applicable federal laws and the procurement standards identified in the Uniform Guidance, including those set forth in §§ 200.317 through 200.327. Condition - During our audit, we noted that the Organization did not have a documented procurement policy in place that complies with the Uniform Guidance. Cause - The Organization has historically had a low volume of procurement activity and has not formalized written procurement procedures. Effect - Without a documented procurement policy, there is an increased risk that future procurements may not comply with applicable federal requirements, which could result in unallowable costs or other compliance issues. Questioned Costs - None noted. Context - This condition was identified during our testing of internal controls over compliance for the Procurement, Suspension, and Debarment requirement. Although the Organization did not enter into any contracts or purchases during the audit period that exceeded the micro-purchase threshold, the absence of a required policy represents a significant deficiency in internal control over compliance. Recommendation - We recommend that the Organization develop and implement a written procurement policy that complies with 2 C.F.R. §§ 200.318–.327 and ensure that staff are trained on its provisions. View of Responsible Officials - We agree with the finding. The organization lacked a formal procurement policy.
Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (Individuals with Disabilities Education Act) Federal Award Identification Number: Grant Year: 2023 Assistance Listing Number: 84.027 Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-SDE64370-20977 Award Period: June 7, 2022, through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The Board of Education 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 Board of Education plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Board of Education procurement policies 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. Client did not have adequate support for verification by management of vendor status for suspension or debarment. Questioned Costs: None Context: Per review of vendor agreements during testing over suspension and debarment, there was no indication of a suspension and debarment clause or verification of vendor status by management. Cause: The significant deficiency is primarily due to inadequate internal controls over the procurement process. Effect: With the absence of a compliant policy, the City could process transactions that do not follow federal Uniform Guidance procurement standards. Repeat Finding: No Recommendation: We recommend that management review and enhance the procedures over the procurement and purchasing process, to be sure that all federal grant expenditures and contracts with vendors are performed properly in accordance with the Uniform Guidance. Views of Responsible Officials: Management agrees with the auditors’ recommendations.
Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (Individuals with Disabilities Education Act) Federal Award Identification Number: Grant Year: 2023 Assistance Listing Number: 84.027 Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-SDE64370-20977 Award Period: June 7, 2022, through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The Board of Education 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 Board of Education plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Board of Education procurement policies 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. Client did not have adequate support for verification by management of vendor status for suspension or debarment. Questioned Costs: None Context: Per review of vendor agreements during testing over suspension and debarment, there was no indication of a suspension and debarment clause or verification of vendor status by management. Cause: The significant deficiency is primarily due to inadequate internal controls over the procurement process. Effect: With the absence of a compliant policy, the City could process transactions that do not follow federal Uniform Guidance procurement standards. Repeat Finding: No Recommendation: We recommend that management review and enhance the procedures over the procurement and purchasing process, to be sure that all federal grant expenditures and contracts with vendors are performed properly in accordance with the Uniform Guidance. Views of Responsible Officials: Management agrees with the auditors’ recommendations.
Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster (Individuals with Disabilities Education Act) Federal Award Identification Number: Grant Year: 2023 Assistance Listing Number: 84.027 Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-SDE64370-20977 Award Period: June 7, 2022, through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or Specific Requirement: The Board of Education 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 Board of Education plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Condition: The Board of Education procurement policies 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. Client did not have adequate support for verification by management of vendor status for suspension or debarment. Questioned Costs: None Context: Per review of vendor agreements during testing over suspension and debarment, there was no indication of a suspension and debarment clause or verification of vendor status by management. Cause: The significant deficiency is primarily due to inadequate internal controls over the procurement process. Effect: With the absence of a compliant policy, the City could process transactions that do not follow federal Uniform Guidance procurement standards. Repeat Finding: No Recommendation: We recommend that management review and enhance the procedures over the procurement and purchasing process, to be sure that all federal grant expenditures and contracts with vendors are performed properly in accordance with the Uniform Guidance. Views of Responsible Officials: Management agrees with the auditors’ recommendations.
2023-007 – Procurement, Small Purchases (Significant Deficiency in Internal Controls over Compliance, Questioned Costs Greater than $25k) Federal Program Information Federal Award Title and ALN: Research & Development Cluster, 84.031 Federal Awarding Agency: U.S. Department of Education Federal Award ID Number: P031S210288, P031C200002 Federal Award Year: 2023 Condition: During our review of procurement testing, the College did not follow small purchase procedures and obtain quotes to ensure the vendor with the lowest price was used for one sample. Criteria: Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained. Per 2 CFR 200.318(i), non-federal entities must retain documentation sufficient to detail the history of procurement decisions. Cause: The College did not obtain three quotes prior to using vendor for a purchase. Effect: The College may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. Questioned Costs: Known and likely questioned costs of $32,607 Auditor recommendation: We recommend the College strengthen controls to ensure purchasing policies and procedures are being followed and train staff in the purchasing department to comply with all relevant federal procurement requirements.
2023-008 – Procurement, Above Simple Acquisition (Significant Deficiency in Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Research & Development Cluster, 84.031 Federal Awarding Agency: U.S. Department of Education Federal Award ID Number: P031S210288, P031C200002 Federal Award Year: 2023 Condition: During our review of procurement testing, the College did not get Board approval per policy on a purchase over the threshold. Criteria: Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(i), non-federal entities must retain documentation sufficient to detail the history of procurement decisions. Cause: The College did not get Board approval for purchases above simple acquisition. Effect: The College may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the grantor agency. Questioned Costs: None Auditor recommendation: We recommend the College strengthen controls to ensure purchasing policies and procedures are being followed and train staff in the purchasing department to comply with all relevant federal procurement requirements.
2023-007 – Procurement, Small Purchases (Significant Deficiency in Internal Controls over Compliance, Questioned Costs Greater than $25k) Federal Program Information Federal Award Title and ALN: Research & Development Cluster, 84.031 Federal Awarding Agency: U.S. Department of Education Federal Award ID Number: P031S210288, P031C200002 Federal Award Year: 2023 Condition: During our review of procurement testing, the College did not follow small purchase procedures and obtain quotes to ensure the vendor with the lowest price was used for one sample. Criteria: Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained. Per 2 CFR 200.318(i), non-federal entities must retain documentation sufficient to detail the history of procurement decisions. Cause: The College did not obtain three quotes prior to using vendor for a purchase. Effect: The College may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. Questioned Costs: Known and likely questioned costs of $32,607 Auditor recommendation: We recommend the College strengthen controls to ensure purchasing policies and procedures are being followed and train staff in the purchasing department to comply with all relevant federal procurement requirements.
2023-008 – Procurement, Above Simple Acquisition (Significant Deficiency in Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Research & Development Cluster, 84.031 Federal Awarding Agency: U.S. Department of Education Federal Award ID Number: P031S210288, P031C200002 Federal Award Year: 2023 Condition: During our review of procurement testing, the College did not get Board approval per policy on a purchase over the threshold. Criteria: Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(i), non-federal entities must retain documentation sufficient to detail the history of procurement decisions. Cause: The College did not get Board approval for purchases above simple acquisition. Effect: The College may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the grantor agency. Questioned Costs: None Auditor recommendation: We recommend the College strengthen controls to ensure purchasing policies and procedures are being followed and train staff in the purchasing department to comply with all relevant federal procurement requirements.
2023-007 – Procurement, Small Purchases (Significant Deficiency in Internal Controls over Compliance, Questioned Costs Greater than $25k) Federal Program Information Federal Award Title and ALN: Research & Development Cluster, 84.031 Federal Awarding Agency: U.S. Department of Education Federal Award ID Number: P031S210288, P031C200002 Federal Award Year: 2023 Condition: During our review of procurement testing, the College did not follow small purchase procedures and obtain quotes to ensure the vendor with the lowest price was used for one sample. Criteria: Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained. Per 2 CFR 200.318(i), non-federal entities must retain documentation sufficient to detail the history of procurement decisions. Cause: The College did not obtain three quotes prior to using vendor for a purchase. Effect: The College may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. Questioned Costs: Known and likely questioned costs of $32,607 Auditor recommendation: We recommend the College strengthen controls to ensure purchasing policies and procedures are being followed and train staff in the purchasing department to comply with all relevant federal procurement requirements.
2023-008 – Procurement, Above Simple Acquisition (Significant Deficiency in Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Research & Development Cluster, 84.031 Federal Awarding Agency: U.S. Department of Education Federal Award ID Number: P031S210288, P031C200002 Federal Award Year: 2023 Condition: During our review of procurement testing, the College did not get Board approval per policy on a purchase over the threshold. Criteria: Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(i), non-federal entities must retain documentation sufficient to detail the history of procurement decisions. Cause: The College did not get Board approval for purchases above simple acquisition. Effect: The College may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the grantor agency. Questioned Costs: None Auditor recommendation: We recommend the College strengthen controls to ensure purchasing policies and procedures are being followed and train staff in the purchasing department to comply with all relevant federal procurement requirements.
2023-007 – Procurement, Small Purchases (Significant Deficiency in Internal Controls over Compliance, Questioned Costs Greater than $25k) Federal Program Information Federal Award Title and ALN: Research & Development Cluster, 84.031 Federal Awarding Agency: U.S. Department of Education Federal Award ID Number: P031S210288, P031C200002 Federal Award Year: 2023 Condition: During our review of procurement testing, the College did not follow small purchase procedures and obtain quotes to ensure the vendor with the lowest price was used for one sample. Criteria: Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained. Per 2 CFR 200.318(i), non-federal entities must retain documentation sufficient to detail the history of procurement decisions. Cause: The College did not obtain three quotes prior to using vendor for a purchase. Effect: The College may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. Questioned Costs: Known and likely questioned costs of $32,607 Auditor recommendation: We recommend the College strengthen controls to ensure purchasing policies and procedures are being followed and train staff in the purchasing department to comply with all relevant federal procurement requirements.
2023-008 – Procurement, Above Simple Acquisition (Significant Deficiency in Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Research & Development Cluster, 84.031 Federal Awarding Agency: U.S. Department of Education Federal Award ID Number: P031S210288, P031C200002 Federal Award Year: 2023 Condition: During our review of procurement testing, the College did not get Board approval per policy on a purchase over the threshold. Criteria: Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(i), non-federal entities must retain documentation sufficient to detail the history of procurement decisions. Cause: The College did not get Board approval for purchases above simple acquisition. Effect: The College may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the grantor agency. Questioned Costs: None Auditor recommendation: We recommend the College strengthen controls to ensure purchasing policies and procedures are being followed and train staff in the purchasing department to comply with all relevant federal procurement requirements.
Criteria or specific requirement (including statutory, regulatory, or other citation): Procurement. The District should follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. Condition: The District did not follow the small purchase method for procurement that is required for purchases made between $10,000 and $250,000. This method requires that price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b). Questioned Costs: None. Context: There was only one purchase over $10,000 made with these grants funds during the fiscal year and the required procurement method was not followed. Effect: The District did not comply with the required procurement standard. Cause: This purchase had to be made quickly so the District used their perferred vendor. Recommendation: We recommend that care is taken to ensure that all the procurement requirements are followed based on the amount of the purchase being made with the federal funds. Management's response: We will follow the procurement standard when not in urgent situations for the product or service we are seeking.
Significant Deficiency 2023-001 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (COVID-19 National School Lunch Program and COVID-19 School Breakfast Program and Food Distribution, Federal Assistance Listing No. 10.553 and 10.555) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws, and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Cost: None. Repeat Finding: Yes. Perspective Information: As part of follow up on this prior audit finding requested support for the performance of this Significant Deficiency Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. procedure due to the turnover in the purchasing agent position verification could not be located. Views of the Responsible Officials and Planned Corrective Actions: The District has reviewed the requirements of 2 CFR Section 200.213. The District is in agreement with the recommendation to implement a procedure to document the process used to verify the eligibility of potential vendors to participate in Federal assistance programs. The verification of excluded parties will be accomplished by accessing the System for Award Management (SAM.gov) website and selecting the “Excluded Entity” filter on the “Exclusions” search page to search for exclusions by Unique Entity ID or CAGE/NCAGE code as follows: 1) Select “Search” from the header menu from any page on SAM.gov 2) In the filters, under “Select Domain”, select “Entity Information”, then select Exclusions 3) Use the filters or keyword box to enter the search criteria and view the results 4) Document the results in the vendor file. Other alternatives for verification may include collecting a certification from the entity or adding a clause or condition to the covered transaction or contract with that entity. The Purchasing Agent is charged with the responsibility of monitoring and ensuring compliance with the suspension and debarment procedures and maintaining documentation that contracts expected to equal or exceed $25,000 have been verified on the System for Award Management (SAM) website before purchases are made. Responsible Person(s): Matt Leon, Assistant Superintendent for Business & Operations and Michael DeSantis, Purchasing Agent Deadline for Completion: On or before 12/1/23 for covered transactions with contracts or purchase orders meeting the threshold during the time period 7/1/22 - 10/31/23. Prior to contract approval or purchase order issuance for contracts or purchase orders meeting the threshold on or after 11/1/23.
Significant Deficiency 2023-001 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (COVID-19 National School Lunch Program and COVID-19 School Breakfast Program and Food Distribution, Federal Assistance Listing No. 10.553 and 10.555) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws, and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Cost: None. Repeat Finding: Yes. Perspective Information: As part of follow up on this prior audit finding requested support for the performance of this Significant Deficiency Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. procedure due to the turnover in the purchasing agent position verification could not be located. Views of the Responsible Officials and Planned Corrective Actions: The District has reviewed the requirements of 2 CFR Section 200.213. The District is in agreement with the recommendation to implement a procedure to document the process used to verify the eligibility of potential vendors to participate in Federal assistance programs. The verification of excluded parties will be accomplished by accessing the System for Award Management (SAM.gov) website and selecting the “Excluded Entity” filter on the “Exclusions” search page to search for exclusions by Unique Entity ID or CAGE/NCAGE code as follows: 1) Select “Search” from the header menu from any page on SAM.gov 2) In the filters, under “Select Domain”, select “Entity Information”, then select Exclusions 3) Use the filters or keyword box to enter the search criteria and view the results 4) Document the results in the vendor file. Other alternatives for verification may include collecting a certification from the entity or adding a clause or condition to the covered transaction or contract with that entity. The Purchasing Agent is charged with the responsibility of monitoring and ensuring compliance with the suspension and debarment procedures and maintaining documentation that contracts expected to equal or exceed $25,000 have been verified on the System for Award Management (SAM) website before purchases are made. Responsible Person(s): Matt Leon, Assistant Superintendent for Business & Operations and Michael DeSantis, Purchasing Agent Deadline for Completion: On or before 12/1/23 for covered transactions with contracts or purchase orders meeting the threshold during the time period 7/1/22 - 10/31/23. Prior to contract approval or purchase order issuance for contracts or purchase orders meeting the threshold on or after 11/1/23.
Significant Deficiency 2023-001 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (COVID-19 National School Lunch Program and COVID-19 School Breakfast Program and Food Distribution, Federal Assistance Listing No. 10.553 and 10.555) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws, and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Cost: None. Repeat Finding: Yes. Perspective Information: As part of follow up on this prior audit finding requested support for the performance of this Significant Deficiency Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. procedure due to the turnover in the purchasing agent position verification could not be located. Views of the Responsible Officials and Planned Corrective Actions: The District has reviewed the requirements of 2 CFR Section 200.213. The District is in agreement with the recommendation to implement a procedure to document the process used to verify the eligibility of potential vendors to participate in Federal assistance programs. The verification of excluded parties will be accomplished by accessing the System for Award Management (SAM.gov) website and selecting the “Excluded Entity” filter on the “Exclusions” search page to search for exclusions by Unique Entity ID or CAGE/NCAGE code as follows: 1) Select “Search” from the header menu from any page on SAM.gov 2) In the filters, under “Select Domain”, select “Entity Information”, then select Exclusions 3) Use the filters or keyword box to enter the search criteria and view the results 4) Document the results in the vendor file. Other alternatives for verification may include collecting a certification from the entity or adding a clause or condition to the covered transaction or contract with that entity. The Purchasing Agent is charged with the responsibility of monitoring and ensuring compliance with the suspension and debarment procedures and maintaining documentation that contracts expected to equal or exceed $25,000 have been verified on the System for Award Management (SAM) website before purchases are made. Responsible Person(s): Matt Leon, Assistant Superintendent for Business & Operations and Michael DeSantis, Purchasing Agent Deadline for Completion: On or before 12/1/23 for covered transactions with contracts or purchase orders meeting the threshold during the time period 7/1/22 - 10/31/23. Prior to contract approval or purchase order issuance for contracts or purchase orders meeting the threshold on or after 11/1/23.
Significant Deficiency 2023-001 Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (COVID-19 National School Lunch Program and COVID-19 School Breakfast Program and Food Distribution, Federal Assistance Listing No. 10.553 and 10.555) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws, and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Cost: None. Repeat Finding: Yes. Perspective Information: As part of follow up on this prior audit finding requested support for the performance of this Significant Deficiency Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. procedure due to the turnover in the purchasing agent position verification could not be located. Views of the Responsible Officials and Planned Corrective Actions: The District has reviewed the requirements of 2 CFR Section 200.213. The District is in agreement with the recommendation to implement a procedure to document the process used to verify the eligibility of potential vendors to participate in Federal assistance programs. The verification of excluded parties will be accomplished by accessing the System for Award Management (SAM.gov) website and selecting the “Excluded Entity” filter on the “Exclusions” search page to search for exclusions by Unique Entity ID or CAGE/NCAGE code as follows: 1) Select “Search” from the header menu from any page on SAM.gov 2) In the filters, under “Select Domain”, select “Entity Information”, then select Exclusions 3) Use the filters or keyword box to enter the search criteria and view the results 4) Document the results in the vendor file. Other alternatives for verification may include collecting a certification from the entity or adding a clause or condition to the covered transaction or contract with that entity. The Purchasing Agent is charged with the responsibility of monitoring and ensuring compliance with the suspension and debarment procedures and maintaining documentation that contracts expected to equal or exceed $25,000 have been verified on the System for Award Management (SAM) website before purchases are made. Responsible Person(s): Matt Leon, Assistant Superintendent for Business & Operations and Michael DeSantis, Purchasing Agent Deadline for Completion: On or before 12/1/23 for covered transactions with contracts or purchase orders meeting the threshold during the time period 7/1/22 - 10/31/23. Prior to contract approval or purchase order issuance for contracts or purchase orders meeting the threshold on or after 11/1/23.
Federal Agency: U.S. Department of Education, passed through the State of Alaska, Department of Education and Early Development Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, and 10.582 Award Number: None (10.553); None and FD 23.KGSD.01 (10.555); None (10.559), and FF 23.KGSD.01 and FF 23.KGSD.02 (10.582) Award Year: 2023 Type of Finding: Significant deficiency in internal control over compliance and noncompliance Criteria: The District was unable to provide adequate supporting documentation showing that contractors were selected using an adequate procurement process. Condition and Context: Procurement standards required by 2 CFR 200.318 were not followed. During our testing of procurement, we determined that management did not conduct an annual cost study or formal procurement process for food and supplies to be used in the food service program. Cause: Lack of internal control over procurement requirements. Effect: Failure to follow 2 CRF 200.318 could result in loss of federal funding. Also, the District risks overpaying for food and supplies by not following procurement standards. Questioned Costs: None noted. Repeat finding: This is not a repeat finding, as such it appears to be an isolated instance. Recommendation: We recommend that management complies with all procurement requirements applicable to 2 CFR 200.318 to ensure the District’s compliance with such requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.
Federal Agency: U.S. Department of Education, passed through the State of Alaska, Department of Education and Early Development Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, and 10.582 Award Number: None (10.553); None and FD 23.KGSD.01 (10.555); None (10.559), and FF 23.KGSD.01 and FF 23.KGSD.02 (10.582) Award Year: 2023 Type of Finding: Significant deficiency in internal control over compliance and noncompliance Criteria: The District was unable to provide adequate supporting documentation showing that contractors were selected using an adequate procurement process. Condition and Context: Procurement standards required by 2 CFR 200.318 were not followed. During our testing of procurement, we determined that management did not conduct an annual cost study or formal procurement process for food and supplies to be used in the food service program. Cause: Lack of internal control over procurement requirements. Effect: Failure to follow 2 CRF 200.318 could result in loss of federal funding. Also, the District risks overpaying for food and supplies by not following procurement standards. Questioned Costs: None noted. Repeat finding: This is not a repeat finding, as such it appears to be an isolated instance. Recommendation: We recommend that management complies with all procurement requirements applicable to 2 CFR 200.318 to ensure the District’s compliance with such requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.
Federal Agency: U.S. Department of Education, passed through the State of Alaska, Department of Education and Early Development Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, and 10.582 Award Number: None (10.553); None and FD 23.KGSD.01 (10.555); None (10.559), and FF 23.KGSD.01 and FF 23.KGSD.02 (10.582) Award Year: 2023 Type of Finding: Significant deficiency in internal control over compliance and noncompliance Criteria: The District was unable to provide adequate supporting documentation showing that contractors were selected using an adequate procurement process. Condition and Context: Procurement standards required by 2 CFR 200.318 were not followed. During our testing of procurement, we determined that management did not conduct an annual cost study or formal procurement process for food and supplies to be used in the food service program. Cause: Lack of internal control over procurement requirements. Effect: Failure to follow 2 CRF 200.318 could result in loss of federal funding. Also, the District risks overpaying for food and supplies by not following procurement standards. Questioned Costs: None noted. Repeat finding: This is not a repeat finding, as such it appears to be an isolated instance. Recommendation: We recommend that management complies with all procurement requirements applicable to 2 CFR 200.318 to ensure the District’s compliance with such requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.
Federal Agency: U.S. Department of Education, passed through the State of Alaska, Department of Education and Early Development Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, and 10.582 Award Number: None (10.553); None and FD 23.KGSD.01 (10.555); None (10.559), and FF 23.KGSD.01 and FF 23.KGSD.02 (10.582) Award Year: 2023 Type of Finding: Significant deficiency in internal control over compliance and noncompliance Criteria: The District was unable to provide adequate supporting documentation showing that contractors were selected using an adequate procurement process. Condition and Context: Procurement standards required by 2 CFR 200.318 were not followed. During our testing of procurement, we determined that management did not conduct an annual cost study or formal procurement process for food and supplies to be used in the food service program. Cause: Lack of internal control over procurement requirements. Effect: Failure to follow 2 CRF 200.318 could result in loss of federal funding. Also, the District risks overpaying for food and supplies by not following procurement standards. Questioned Costs: None noted. Repeat finding: This is not a repeat finding, as such it appears to be an isolated instance. Recommendation: We recommend that management complies with all procurement requirements applicable to 2 CFR 200.318 to ensure the District’s compliance with such requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.
Federal Agency: U.S. Department of Education, passed through the State of Alaska, Department of Education and Early Development Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, and 10.582 Award Number: None (10.553); None and FD 23.KGSD.01 (10.555); None (10.559), and FF 23.KGSD.01 and FF 23.KGSD.02 (10.582) Award Year: 2023 Type of Finding: Significant deficiency in internal control over compliance and noncompliance Criteria: The District was unable to provide adequate supporting documentation showing that contractors were selected using an adequate procurement process. Condition and Context: Procurement standards required by 2 CFR 200.318 were not followed. During our testing of procurement, we determined that management did not conduct an annual cost study or formal procurement process for food and supplies to be used in the food service program. Cause: Lack of internal control over procurement requirements. Effect: Failure to follow 2 CRF 200.318 could result in loss of federal funding. Also, the District risks overpaying for food and supplies by not following procurement standards. Questioned Costs: None noted. Repeat finding: This is not a repeat finding, as such it appears to be an isolated instance. Recommendation: We recommend that management complies with all procurement requirements applicable to 2 CFR 200.318 to ensure the District’s compliance with such requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.
Federal Agency: U.S. Department of Education, passed through the State of Alaska, Department of Education and Early Development Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, and 10.582 Award Number: None (10.553); None and FD 23.KGSD.01 (10.555); None (10.559), and FF 23.KGSD.01 and FF 23.KGSD.02 (10.582) Award Year: 2023 Type of Finding: Significant deficiency in internal control over compliance and noncompliance Criteria: The District was unable to provide adequate supporting documentation showing that contractors were selected using an adequate procurement process. Condition and Context: Procurement standards required by 2 CFR 200.318 were not followed. During our testing of procurement, we determined that management did not conduct an annual cost study or formal procurement process for food and supplies to be used in the food service program. Cause: Lack of internal control over procurement requirements. Effect: Failure to follow 2 CRF 200.318 could result in loss of federal funding. Also, the District risks overpaying for food and supplies by not following procurement standards. Questioned Costs: None noted. Repeat finding: This is not a repeat finding, as such it appears to be an isolated instance. Recommendation: We recommend that management complies with all procurement requirements applicable to 2 CFR 200.318 to ensure the District’s compliance with such requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.
Federal Agency: U.S. Department of Education, passed through the State of Alaska, Department of Education and Early Development Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, and 10.582 Award Number: None (10.553); None and FD 23.KGSD.01 (10.555); None (10.559), and FF 23.KGSD.01 and FF 23.KGSD.02 (10.582) Award Year: 2023 Type of Finding: Significant deficiency in internal control over compliance and noncompliance Criteria: The District was unable to provide adequate supporting documentation showing that contractors were selected using an adequate procurement process. Condition and Context: Procurement standards required by 2 CFR 200.318 were not followed. During our testing of procurement, we determined that management did not conduct an annual cost study or formal procurement process for food and supplies to be used in the food service program. Cause: Lack of internal control over procurement requirements. Effect: Failure to follow 2 CRF 200.318 could result in loss of federal funding. Also, the District risks overpaying for food and supplies by not following procurement standards. Questioned Costs: None noted. Repeat finding: This is not a repeat finding, as such it appears to be an isolated instance. Recommendation: We recommend that management complies with all procurement requirements applicable to 2 CFR 200.318 to ensure the District’s compliance with such requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER (INCLUDING COVID-19 FUNDING) – FEDERAL ALN 84.027 AND 84.173 AND – U.S. DEPARTMENT OF THE TREASURY, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – FEDERAL ALN 21.027 2023-001 Internal Control Over Compliance and Material Noncompliance With Federal Procurement, Suspension, and Debarment Requirements Criteria – 2 CFR § 180.425-430 and 2 CFR § 200.318-327 requires Independent School District No. 12 (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, suspension, and debarment requirements applicable to the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place resulting in material noncompliance within its special education cluster and coronavirus state and local fiscal recovery funds 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 District did not document procurement policy and Uniform Guidance requirements related to methods of procurement and a proper documentation of suspension and debarment testing was not maintained to ensure compliance with this requirement in the current year. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel, due in part, to staff turnover. Effect – Noncompliance with procurement, suspension, and debarment requirements could result in the District 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 District review its internal control procedures relating to procurement, suspension, and debarment for the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Internal controls over compliance should be in place to ensure compliance with federal procurement procedures, including awarding and documenting contracts based on sealed bids or quotations for the purchase of goods or services exceeding applicable federal dollar thresholds. Internal controls over compliance should also include verification that any vendor with which the District 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 District agrees with the finding. The District intends to review its policies and procedures relating to procurement, suspension, and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER (INCLUDING COVID-19 FUNDING) – FEDERAL ALN 84.027 AND 84.173 AND – U.S. DEPARTMENT OF THE TREASURY, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – FEDERAL ALN 21.027 2023-001 Internal Control Over Compliance and Material Noncompliance With Federal Procurement, Suspension, and Debarment Requirements Criteria – 2 CFR § 180.425-430 and 2 CFR § 200.318-327 requires Independent School District No. 12 (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, suspension, and debarment requirements applicable to the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place resulting in material noncompliance within its special education cluster and coronavirus state and local fiscal recovery funds 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 District did not document procurement policy and Uniform Guidance requirements related to methods of procurement and a proper documentation of suspension and debarment testing was not maintained to ensure compliance with this requirement in the current year. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel, due in part, to staff turnover. Effect – Noncompliance with procurement, suspension, and debarment requirements could result in the District 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 District review its internal control procedures relating to procurement, suspension, and debarment for the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Internal controls over compliance should be in place to ensure compliance with federal procurement procedures, including awarding and documenting contracts based on sealed bids or quotations for the purchase of goods or services exceeding applicable federal dollar thresholds. Internal controls over compliance should also include verification that any vendor with which the District 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 District agrees with the finding. The District intends to review its policies and procedures relating to procurement, suspension, and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER (INCLUDING COVID-19 FUNDING) – FEDERAL ALN 84.027 AND 84.173 AND – U.S. DEPARTMENT OF THE TREASURY, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – FEDERAL ALN 21.027 2023-001 Internal Control Over Compliance and Material Noncompliance With Federal Procurement, Suspension, and Debarment Requirements Criteria – 2 CFR § 180.425-430 and 2 CFR § 200.318-327 requires Independent School District No. 12 (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, suspension, and debarment requirements applicable to the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place resulting in material noncompliance within its special education cluster and coronavirus state and local fiscal recovery funds 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 District did not document procurement policy and Uniform Guidance requirements related to methods of procurement and a proper documentation of suspension and debarment testing was not maintained to ensure compliance with this requirement in the current year. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel, due in part, to staff turnover. Effect – Noncompliance with procurement, suspension, and debarment requirements could result in the District 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 District review its internal control procedures relating to procurement, suspension, and debarment for the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Internal controls over compliance should be in place to ensure compliance with federal procurement procedures, including awarding and documenting contracts based on sealed bids or quotations for the purchase of goods or services exceeding applicable federal dollar thresholds. Internal controls over compliance should also include verification that any vendor with which the District 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 District agrees with the finding. The District intends to review its policies and procedures relating to procurement, suspension, and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER (INCLUDING COVID-19 FUNDING) – FEDERAL ALN 84.027 AND 84.173 AND – U.S. DEPARTMENT OF THE TREASURY, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – FEDERAL ALN 21.027 2023-001 Internal Control Over Compliance and Material Noncompliance With Federal Procurement, Suspension, and Debarment Requirements Criteria – 2 CFR § 180.425-430 and 2 CFR § 200.318-327 requires Independent School District No. 12 (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, suspension, and debarment requirements applicable to the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place resulting in material noncompliance within its special education cluster and coronavirus state and local fiscal recovery funds 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 District did not document procurement policy and Uniform Guidance requirements related to methods of procurement and a proper documentation of suspension and debarment testing was not maintained to ensure compliance with this requirement in the current year. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel, due in part, to staff turnover. Effect – Noncompliance with procurement, suspension, and debarment requirements could result in the District 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 District review its internal control procedures relating to procurement, suspension, and debarment for the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Internal controls over compliance should be in place to ensure compliance with federal procurement procedures, including awarding and documenting contracts based on sealed bids or quotations for the purchase of goods or services exceeding applicable federal dollar thresholds. Internal controls over compliance should also include verification that any vendor with which the District 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 District agrees with the finding. The District intends to review its policies and procedures relating to procurement, suspension, and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER (INCLUDING COVID-19 FUNDING) – FEDERAL ALN 84.027 AND 84.173 AND – U.S. DEPARTMENT OF THE TREASURY, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – FEDERAL ALN 21.027 2023-001 Internal Control Over Compliance and Material Noncompliance With Federal Procurement, Suspension, and Debarment Requirements Criteria – 2 CFR § 180.425-430 and 2 CFR § 200.318-327 requires Independent School District No. 12 (the District) to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement, suspension, and debarment requirements applicable to the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Condition – During our audit, we noted the District did not have sufficient controls in place resulting in material noncompliance within its special education cluster and coronavirus state and local fiscal recovery funds 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 District did not document procurement policy and Uniform Guidance requirements related to methods of procurement and a proper documentation of suspension and debarment testing was not maintained to ensure compliance with this requirement in the current year. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – This was an oversight by district personnel, due in part, to staff turnover. Effect – Noncompliance with procurement, suspension, and debarment requirements could result in the District 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 District review its internal control procedures relating to procurement, suspension, and debarment for the special education cluster and coronavirus state and local fiscal recovery funds federal programs. Internal controls over compliance should be in place to ensure compliance with federal procurement procedures, including awarding and documenting contracts based on sealed bids or quotations for the purchase of goods or services exceeding applicable federal dollar thresholds. Internal controls over compliance should also include verification that any vendor with which the District 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 District agrees with the finding. The District intends to review its policies and procedures relating to procurement, suspension, and debarment for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.
Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Lunch Program, School Breakfast Program, and COVD-19 Summer School Food Service Program CFDA No. 10.555, and 10.559) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws, and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of the major program, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Cost: None. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: The District is in a contract with Capital Region BOCES for the management of the school nutrition department. There were staff changes during the year and the new hire was unaware of the requirements. Cathy Meher, District Treasurer will meet with both the new Director and his supervisor at BOCES to relay the audit finding and develop a plan moving forward. This will happen immediately. Perspective Information: As part of testing of compliance over procurement, a selection of vendors charged to the major program was selected for testing of compliance. Of the District’s vendors charged to the program, none were suspended or debarred from participation in Federal assistance programs or activities.
Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Lunch Program, School Breakfast Program, and COVD-19 Summer School Food Service Program CFDA No. 10.555, and 10.559) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws, and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of the major program, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Cost: None. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: The District is in a contract with Capital Region BOCES for the management of the school nutrition department. There were staff changes during the year and the new hire was unaware of the requirements. Cathy Meher, District Treasurer will meet with both the new Director and his supervisor at BOCES to relay the audit finding and develop a plan moving forward. This will happen immediately. Perspective Information: As part of testing of compliance over procurement, a selection of vendors charged to the major program was selected for testing of compliance. Of the District’s vendors charged to the program, none were suspended or debarred from participation in Federal assistance programs or activities.
Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Lunch Program, School Breakfast Program, and COVD-19 Summer School Food Service Program CFDA No. 10.555, and 10.559) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws, and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of the major program, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Cost: None. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: The District is in a contract with Capital Region BOCES for the management of the school nutrition department. There were staff changes during the year and the new hire was unaware of the requirements. Cathy Meher, District Treasurer will meet with both the new Director and his supervisor at BOCES to relay the audit finding and develop a plan moving forward. This will happen immediately. Perspective Information: As part of testing of compliance over procurement, a selection of vendors charged to the major program was selected for testing of compliance. Of the District’s vendors charged to the program, none were suspended or debarred from participation in Federal assistance programs or activities.
Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Lunch Program, School Breakfast Program, and COVD-19 Summer School Food Service Program CFDA No. 10.555, and 10.559) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws, and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of the major program, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Cost: None. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: The District is in a contract with Capital Region BOCES for the management of the school nutrition department. There were staff changes during the year and the new hire was unaware of the requirements. Cathy Meher, District Treasurer will meet with both the new Director and his supervisor at BOCES to relay the audit finding and develop a plan moving forward. This will happen immediately. Perspective Information: As part of testing of compliance over procurement, a selection of vendors charged to the major program was selected for testing of compliance. Of the District’s vendors charged to the program, none were suspended or debarred from participation in Federal assistance programs or activities.
Child Nutrition Cluster - Procurement Information on Federal Program: U.S Department of Agriculture Child Nutrition Cluster (National School Lunch Program, School Breakfast Program, and COVD-19 Summer School Food Service Program CFDA No. 10.555, and 10.559) passed through the New York State Education Department. Criteria: CFR Section 200.318 stipulates that a non-Federal entity must use its own documented procurement procedures which reflect applicable state, local, and tribal laws, and regulations, provided that the procurements conform to applicable Federal law and the standards identified in Part 200 Subpart D. Additionally, 2 CFR Section 200.213 stipulates that no awards, subawards, or contracts be awarded to parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Statement of Condition: During our discussions with management and testing of the major program, we noted that the District is not verifying the eligibility of vendors to participate in Federal assistance programs. Statement of Cause: The District did not review compliance requirements related to procurement outlined in 2 CFR Section 200.318 and Section 200.213. Statement of Effect: The District is not in compliance with 2 CFR Section 200.213. The District is not performing required procedures, as a result, vendors that are not eligible for participation in Federal assistance programs or activities could be selected or the District could be overpaying for goods and services. Questioned Cost: None. Repeat Finding: Yes Recommendation: We recommend that the District review the requirements of 2 CFR Section 200.213 and ensure that a review of the eligibility of potential vendors to participate in Federal assistance programs or activities is performed prior to disbursing funds to the vendor. Views of the Responsible Officials and Planned Corrective Actions: The District is in a contract with Capital Region BOCES for the management of the school nutrition department. There were staff changes during the year and the new hire was unaware of the requirements. Cathy Meher, District Treasurer will meet with both the new Director and his supervisor at BOCES to relay the audit finding and develop a plan moving forward. This will happen immediately. Perspective Information: As part of testing of compliance over procurement, a selection of vendors charged to the major program was selected for testing of compliance. Of the District’s vendors charged to the program, none were suspended or debarred from participation in Federal assistance programs or activities.
Program: Magnet Schools Assistance (Assistance Listing No. 84.165) Compliance Requirement – Procurement, Suspension and Debarment Finding Type: Material Noncompliance / Material Weakness in Internal Controls over Compliance Criteria: 2 CFR Part 180.300 requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity and its principals, as defined in 2 CFR section 180.995 and agency adopting regulations, are not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/ (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. In addition, under 2 CFR 200.318, the non-Federal entity must have and use documented procurement procedures for the acquisition of property or services required under a Federal award or subaward. Condition: The Magnet Schools Assistance Program (MSAP) office did not verify that contracted vendors are not suspended or debarred or otherwise excluded from participating in program transactions prior to their participation. In addition, the MSAP Director entered into a contract for services without having the authority to do so, thus circumventing the procurement procedures of the District. Cause: The MSAP office was unaware of the federal requirements related to verifying that contracted vendors are not suspended or debarred or otherwise excluded from participating in program transactions. In addition, it appears that the MSAP Director felt her position provided her the authority to enter into contracts under her program, regardless of standard District procurement procedures. Effect: The failure to verify suspension and debarment can result in entering into prohibited transactions, leading to non-compliance and the loss of program funding. In addition, not following procurement procedures can result in prohibited transactions and the repayment of federal funds used. Auditor’s Recommendations: The MSAP office should familiarize themselves with federal compliance requirements including suspension and debarment. In addition, the MSAP office should ensure all transactions that do not qualify as “small-purchases” be procured by the District Procurement Department. Views of Responsible Official: The MSAP program will undergo specific training related to federal compliance including procurement, suspension and debarment. The District will implement additional monitoring procedures to ensure transactions that do not qualify as “small-purchases” be procured by the District Procurement Department.
2023-003 Procurement; Federal Agency: Department of Health and Human Services; Program: Social Services Research and Demonstration (ALN 93.647); Pass-through Entity: N/A; Federal Assistance Identification Number or Pass-Through Numbers: N/A; Federal Award Years: Year ended June 30, 2023; Type of Finding: Material Weakness in Internal Control over Compliance; Other Matter Compliance Finding; Criteria: 2 CFR 200.303(a) requires that each 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." 2 CFR 200.320 requires that each non-Federal entity must "have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award." Condition: While testing the procurement requirement, we were able to test compensating controls, but noted that internal controls were not properly designed over the procurement requirement. Prior to receiving federal funding beginning in August 2022, the program conducted a request for proposal (RFP) process and began contracting with a vendor. When federal funding was obtained, the vendor was not reevaluated in accordance with the Uniform Guidance to ensure the procurement requirements were being met. In addition, we noted UW Health – Madison’s procurement policy documents do not include all of the information that is required by the Uniform Guidance. Cause: Because the vendor was already in place for the program prior to receiving federal funds, management did not recognize the need to reevaluate the vendor under the requirements of the Uniform Guidance. In addition, management also did not recognize the need to include additional information in its procurement policy documents related to the Uniform Guidance. Effect: Without appropriate internal controls, there is an increased risk of noncompliance related to federal funding. Context: We identified and tested one vendor that was direct and material to the program and related to the procurement and suspension and debarment requirements. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits.Questioned Costs: None. Repeat Finding?: No; Recommendation: While it was determined that the requirements of the Uniform Guidance were met related to the vendor tested, we suggest that management reevaluate all vendors that were previously used prior to receiving federal funding. In addition, we recommend that management update its procurement policies to incorporate the requirements of the Uniform Guidance. View of responsible officials of the auditee: Management agrees with the finding. See corrective action plan.
Federal Agency: Department of the Treasury, Department of Health and Human Services Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds, Substance Abuse and Mental Health Services Projects of Regional and National Significance Listing Number: 21.027, 93.243 Federal Award Identification Number and Year: H79TI080926, 2023 Pass-Through Agency: City of Hartford, Career Resources Inc. Pass-Through Number: C2212 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: The Organization must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The procurement policy and conflict of interest policy of the Organization do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None Context: We reviewed the procurement policy and conflict of interest policy of the Organization and noted that the policies do not include the essential compliance elements as outlined in 2 CFR sections 200.318 through 200.326. Cause: Management was unaware of the restrictive requirements of the new procurement standards. Effect: With the absence of a compliant policy, the Organization is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Organization review its procurement policy and conflict of interest policy and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: Department of the Treasury, Department of Health and Human Services Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds, Substance Abuse and Mental Health Services Projects of Regional and National Significance Listing Number: 21.027, 93.243 Federal Award Identification Number and Year: H79TI080926, 2023 Pass-Through Agency: City of Hartford, Career Resources Inc. Pass-Through Number: C2212 Award Period: 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: The Organization must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The procurement policy and conflict of interest policy of the Organization do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Questioned costs: None Context: We reviewed the procurement policy and conflict of interest policy of the Organization and noted that the policies do not include the essential compliance elements as outlined in 2 CFR sections 200.318 through 200.326. Cause: Management was unaware of the restrictive requirements of the new procurement standards. Effect: With the absence of a compliant policy, the Organization is at risk for noncompliance as it relates to federal procurement. Repeat Finding: No Recommendation: We recommend that the Organization review its procurement policy and conflict of interest policy and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials: There is no disagreement with the audit finding.