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.
2023-002 Improve Documentation and Controls Over Procurement Federal Program(s) Information Federal Agency: U.S. Department of the Treasury Cluster/Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds AL Number(s): 21.027 Award Year: 2023 Compliance Requirement: Procurement Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Per 2 CFR 200.318–200.327, non-federal entities must use their 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 set forth in the Uniform Guidance. In some cases, the Uniform Guidance may establish stricter requirements for procurement, including the need for full and open competition, documentation of procurement history, and specific justifications for sole source or exempt procurements. Entities must comply with the stricter requirements when procuring services. Condition and Context During testing of procurement transactions, the Town was unable to provide documentation supporting procurement for one selected vendor for a design project. The project proceeded with an existing provider for the Town engaged on other projects rather than following the policies and procedures for soliciting competitive sealed bids or proposals for the specific project under the grant. The Procurement Manager relied on an exemption for engineering services under Massachusetts procurement law, which in this case is less restrictive than Uniform Guidance requirements. As a result, the Town did not comply with the federal procurement standards applicable to this transaction. Cause The Town’s internal controls over procurement did not ensure that federal requirements under Uniform Guidance were followed when state and federal rules differed. The Procurement Manager applied state-level exemptions rather than adhering to more restrictive federal standards. Effect or Potential Effect The absence of procurement documentation and use of state exemptions rather than federal requirements increase the risk of non-compliance and may result in unallowable costs. Questioned costs reported as a result of this transaction are $110,901. TOWN OF NORWOOD, MASSACHUSETTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2023 13 SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (CONTINUED) 2023-002 Improve Documentation and Controls Over Procurement (Continued) Recommendation The Town strengthen its internal controls over procurement to ensure compliance with Uniform Guidance requirements, regardless of state law exemptions. The Town should ensure adequate documentation is retained for all federally funded procurements, and that procurement staff are trained on the distinction between federal and state procurement requirements. Views of Responsible Officials Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2023-002 Improve Documentation and Controls Over Procurement Federal Program(s) Information Federal Agency: U.S. Department of the Treasury Cluster/Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds AL Number(s): 21.027 Award Year: 2023 Compliance Requirement: Procurement Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Per 2 CFR 200.318–200.327, non-federal entities must use their 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 set forth in the Uniform Guidance. In some cases, the Uniform Guidance may establish stricter requirements for procurement, including the need for full and open competition, documentation of procurement history, and specific justifications for sole source or exempt procurements. Entities must comply with the stricter requirements when procuring services. Condition and Context During testing of procurement transactions, the Town was unable to provide documentation supporting procurement for one selected vendor for a design project. The project proceeded with an existing provider for the Town engaged on other projects rather than following the policies and procedures for soliciting competitive sealed bids or proposals for the specific project under the grant. The Procurement Manager relied on an exemption for engineering services under Massachusetts procurement law, which in this case is less restrictive than Uniform Guidance requirements. As a result, the Town did not comply with the federal procurement standards applicable to this transaction. Cause The Town’s internal controls over procurement did not ensure that federal requirements under Uniform Guidance were followed when state and federal rules differed. The Procurement Manager applied state-level exemptions rather than adhering to more restrictive federal standards. Effect or Potential Effect The absence of procurement documentation and use of state exemptions rather than federal requirements increase the risk of non-compliance and may result in unallowable costs. Questioned costs reported as a result of this transaction are $110,901. TOWN OF NORWOOD, MASSACHUSETTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) FOR THE YEAR ENDED JUNE 30, 2023 13 SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (CONTINUED) 2023-002 Improve Documentation and Controls Over Procurement (Continued) Recommendation The Town strengthen its internal controls over procurement to ensure compliance with Uniform Guidance requirements, regardless of state law exemptions. The Town should ensure adequate documentation is retained for all federally funded procurements, and that procurement staff are trained on the distinction between federal and state procurement requirements. Views of Responsible Officials Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2023-004 – Procurement, Suspension and Debarment Federal Program Information: Department of Transportation – ALN: - 20.500, 20.507, 20.525 & 20.526 – Federal Transit Cluster 20.509 – Formula Grants for Rural Areas and Tribal Transit Program Criteria: The following CFR(s) apply to this finding: 2 CFR 200.318 to 327. Condition: During audit procedures, it was identified that the Committee did not follow policies and procedures as adopted. Cause: The Committee does not have the necessary internal controls over compliance. Effect: Insufficient controls could result in unallowable expenses being charged to the program and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: While reviewing the procurement policies and procedures, the auditor requested the micro and small purchases form, as found in the procurement policies and procedures documents, but none could be provided for the samples originally requested. Repeat Finding: This is not a repeat finding. Recommendation: The auditor recommends that the Committee update its procurement policy and implement internal control processes and procedures to ensure that they are following the criteria above. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Biddeford-Saco-Old Orchard Beach Transit Committee.
Federal Program Name: Research and Development Cluster Federal Agency: National Science Foundation Federal Assistance Listing Title and Number: 47.074 Award Year: June 1, 2022 – May 31, 2023 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The University’s procurement policy does not contain adequate documentation to demonstrate compliance with federal procurement regulations. (Deficiency) Questioned Costs: None. Context: The University’s documented procurement policies do not contain all the specified requirements of 2 CFR sections 200.318 through 200.326. Effect: The risks exist that the University could follow their procurement policy and procure an item with federal funds, which would not meet the federal procurement regulations. Cause: The writing of the policy did not take into account federal procurement regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: Yes Recommendation: We recommend the University revise procurement policies to incorporate all required elements of federal procurement regulations. Views of Responsible Officials and Planned Corrective Action: The University agrees with the finding, a revised policy has been drafted and was approved in September 2023.
Federal Program Name: Research and Development Cluster Federal Agency: National Science Foundation Federal Assistance Listing Title and Number: 47.074 Award Year: June 1, 2022 – May 31, 2023 Criteria or Specific Requirement: Procurement, Suspension and Debarment Condition: The University’s procurement policy does not contain adequate documentation to demonstrate compliance with federal procurement regulations. (Deficiency) Questioned Costs: None. Context: The University’s documented procurement policies do not contain all the specified requirements of 2 CFR sections 200.318 through 200.326. Effect: The risks exist that the University could follow their procurement policy and procure an item with federal funds, which would not meet the federal procurement regulations. Cause: The writing of the policy did not take into account federal procurement regulations which are required to be incorporated for items procured with federal funds. Repeat Finding: Yes Recommendation: We recommend the University revise procurement policies to incorporate all required elements of federal procurement regulations. Views of Responsible Officials and Planned Corrective Action: The University agrees with the finding, a revised policy has been drafted and was approved in September 2023.
Finding 2023-004 (Material Weakness) Program: Choice Neighborhoods Implementation Grants Federal Agency: Department of Housing and Urban Development (HUD) AL #: 14.889 Federal Award Identification Number and Year: Various - See SEFA Pass-through Entity: N/A Type of Compliance Finding: I) Procurement, Suspension & Debarment 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 regulation, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200 and they must not be suspended or debarred. Condition/Context The City did not provide evidence supporting the City's compliance with this requirement. Cause The City did not follow their internal control processes and procedures. Effect The failure of the City to adhere to all Choice Neighborhoods Implementation Grants requirements could result in the repayment of grant funds. Questioned Costs Unknown Is the finding a repeat finding No Recommendations We recommend that the City submit/provide all required documentation to meet compliance requirements. Views of Responsible Officials/Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization's letterhead.
Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID‐19 Testing and Mitigation for Rural Health Clinics Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Health System is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. The non‐Federal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.318 through 200.327 which also requires documentation to be retained to detail the history of procurements. Condition: The Health System did not obtain quotes from multiple vendors as it relates to the procurement and purchasing of flooring which was over the micro‐purchase threshold. In addition, Health System did not have a written procurement policy or written standards of conduct policy related to procurement. Cause: The Health System did not have a procurement policy in place. Effect: Without obtaining multiple quotes and having a procurement policy or standards of conduct policy related to procurement, demonstrating that the Health System complies with laws, regulations, and other compliance requirements is difficult. Questioned Costs: Covered transactions entered into by the Health System over the micro‐purchase threshold without multiple quotes totaled $147,460. Questioned costs are unable to be identified as multiple quotes were not received by the Health System to ensure the price paid was reasonable. Context: Sampling was not used as only three vendors had purchases over $10,000. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System implement a procurement policy and standards of conduct policy related to procurement, implement internal control processes to ensure compliance with their procurement policy, and retain documentation to support procurement, suspension and debarment procedures performed. Views of Responsible Officials: Management agrees with the finding.
Finding 2023-004 (Material Weakness) Program: Choice Neighborhoods Implementation Grants Federal Agency: Department of Housing and Urban Development (HUD) AL #: 14.889 Federal Award Identification Number and Year: Various - See SEFA Pass-through Entity: N/A Type of Compliance Finding: I) Procurement, Suspension & Debarment 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 regulation, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200 and they must not be suspended or debarred. Condition/Context The City did not provide evidence supporting the City's compliance with this requirement. Cause The City did not follow their internal control processes and procedures. Effect The failure of the City to adhere to all Choice Neighborhoods Implementation Grants requirements could result in the repayment of grant funds. Questioned Costs Unknown Is the finding a repeat finding No Recommendations We recommend that the City submit/provide all required documentation to meet compliance requirements. Views of Responsible Officials/Planned Corrective Actions Management agrees with the finding. See Corrective Action Plan on Organization's letterhead.
Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID‐19 Testing and Mitigation for Rural Health Clinics Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Health System is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. The non‐Federal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.318 through 200.327 which also requires documentation to be retained to detail the history of procurements. Condition: The Health System did not obtain quotes from multiple vendors as it relates to the procurement and purchasing of flooring which was over the micro‐purchase threshold. In addition, Health System did not have a written procurement policy or written standards of conduct policy related to procurement. Cause: The Health System did not have a procurement policy in place. Effect: Without obtaining multiple quotes and having a procurement policy or standards of conduct policy related to procurement, demonstrating that the Health System complies with laws, regulations, and other compliance requirements is difficult. Questioned Costs: Covered transactions entered into by the Health System over the micro‐purchase threshold without multiple quotes totaled $147,460. Questioned costs are unable to be identified as multiple quotes were not received by the Health System to ensure the price paid was reasonable. Context: Sampling was not used as only three vendors had purchases over $10,000. Repeat Finding from Prior Years: No Recommendation: We recommend the Health System implement a procurement policy and standards of conduct policy related to procurement, implement internal control processes to ensure compliance with their procurement policy, and retain documentation to support procurement, suspension and debarment procedures performed. Views of Responsible Officials: Management agrees with the finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L2C42352-01-00 Award Periods: July 1, 2021 – June 30, 2023 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: Legacy did not document that sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: Two (2) of two (2) vendors tested. Documentation was provided to show that sam.gov was checked, however it occurred on the last day of the fiscal year. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had be checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: Yes. Prior Year Finding: 2022-003. Recommendation: We recommend that Legacy check, and document, the use of Sam.gov to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to entering into a contract. Views of Responsible Officials: There is no disagreement with the audit finding.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 66.458, Environmental Protection Agency, Capitalization Grants for Clean Water State Revolving Funds Federal Award Identification Number and Year: 5749-01, Loan Period 06/18/2022-11/15/2024 Pass-through Entity: Michigan Department of Environment, Great Lakes, and Energy Finance Division - Water Infrastructure Financing Section (EGLE) Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.318 (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. In addition, per 2 CFR 200.318 (i), the non-Federal entity must maintain records sufficient to detail the history of procurement. Condition: The Township did not utilize federal procurement requirements cited above for the engineering services for the State Clean Water Revolving Fund project. Identification of How Likely Questioned Costs Were Computed: The questioned costs were determined from actual engineering design and construction cost billed (federal portion) during the June 18, 2022 through March 31, 2023 period as summarized from the request for disbursement of funds submitted to EGLE. Known Questioned Costs: $295,854 Context: We tested the procurement of four contracts, 100% of the contracts, and identified one contract that did not follow federal procurement requirements. Cause/Effect: A number of years ago the Township bid engineering services and selected an engineer firm however there were issues with that firm therefore the Township replaced the original engineer with a local engineering firm that they have utilized on other Township projects. Therefore, they did not belief they need to bid engineering services for this project. The Township did not utilize federal procurement requirements to ensure fair and open competition and reasonable cost for engineering services for the State Clean Water Revolving Fund project. Recommendation: We recommend the Township follow federal procurement as required in 2 CFR 200.319 (d) for all contracts reimbursed with federal funds. View of responsible officials and planned corrective action plan: See attached corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 66.458, Environmental Protection Agency. Capitalization Grants for Clean Water State Revolving Funds Federal Award Identification Number and Year: 5749-01, Loan Period 06/18/2022-11/15/2024 Pass-through Entity: Michigan Department of Environment, Great Lakes, and Energy Finance Division - Water Infrastructure Financing Section Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: As a precondition to receive federal awards, prospective recipients must have effective internal controls over the federal award. As described in 2 CFR, Part 200.303, nonfederal entities must have certain written policies and procedures surrounding the management of their federal awards. Such policies should include procedures for collecting payments of federal funds per 2 CRF 200.305, cash management (i.e., minimizing the time between draws and actual disbursing of federal awards) per 2 CFR 200.302(b)(6), allowable cost per 2 CFR 200.403, and conflict of interest per 2 CFR 200.318. Per 2 CFR 200.319 (d), the non-Federal entity must have written procedures for procurement transactions. Condition: The Township did not have written procedures for cash management, allowable cost or conflict of interest. In addition, the Township procurement policy did not include all necessary items specified in the Uniform Guidance. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None Context: N/A Cause/Effect: The Township was not aware that they were required to have written policies and procedures for the items noted above and was using the grant agreement requirements for guidelines. The Township's controls were not adequate to ensure it followed the federal requirement over these processes. Recommendation: We recommend the Township adopt written policies and procedures over cash management, allowable costs, and conflicts of interest. In addition, we recommend that management review and modify the procedure policy to include all the necessary items outline in the Uniform Guidance. View of responsible officials and planned corrective action plan: See attached corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 66.458, Environmental Protection Agency. Capitalization Grants for Clean Water State Revolving Funds Federal Award Identification Number and Year: 5749-01, Loan Period 06/18/2022-11/15/2024 Pass-through Entity: Michigan Department of Environment, Great Lakes, and Energy Finance Division - Water Infrastructure Financing Section Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: A nonfederal entity must have adequate procedures in place to verify that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded (2 CFR sections 200.212 and 200.318(h); 2 CRF section 180.300; 48 CFR section 52.209-6). Condition: During procurement testing of the Capitalization Grants for Clean Water Revolving Funds, we noted that the Township did not have documentation that sam.gov was reviewed to ensure the contractors were not suspended or debarred. The only consideration of debarment or suspension appears to be requirement to have contractors provide a signed certification to the effect of not being debarred or suspended from participation in federally funded projects. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None. Subsequently, the sam.gov was reviewed to ensure that the contractors were not suspended or debarred. Context: None of the four contractors utilized for the Capitalization Grants for Clean Water Revolving Funds project were evaluated. Cause/Effect: The lead engineer left the employment of the engineering company, and they believe that he would have tested for suspension or debarment at the time of initiating the contracts, however no documentation could be located. The Township did not have controls in place to comply with suspension and debarment evaluation requirements. Recommendation: We recommend the Township implement adequate controls to ensure verification of debarment, suspension, or exclusion takes place before entering into covered transactions. View of responsible officials and planned corrective action plan: See attached corrective action plan.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Grants for New and Expanded Services Under the Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: L2C42352-01-00 Award Periods: July 1, 2021 – June 30, 2023 Type of Finding: Significant deficiency in internal control over compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: Legacy did not document that sam.gov was checked prior to entering into a contract with a vendor. Questioned Costs: None. Context: Two (2) of two (2) vendors tested. Documentation was provided to show that sam.gov was checked, however it occurred on the last day of the fiscal year. Cause: Legacy did not create and maintain documentation showing that suspension and debarment had be checked prior to engaging a vendor. Effect: Contracted vendors may be ineligible to receive federal dollars for services performed. Repeat Finding: Yes. Prior Year Finding: 2022-003. Recommendation: We recommend that Legacy check, and document, the use of Sam.gov to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to entering into a contract. Views of Responsible Officials: There is no disagreement with the audit finding.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 66.458, Environmental Protection Agency, Capitalization Grants for Clean Water State Revolving Funds Federal Award Identification Number and Year: 5749-01, Loan Period 06/18/2022-11/15/2024 Pass-through Entity: Michigan Department of Environment, Great Lakes, and Energy Finance Division - Water Infrastructure Financing Section (EGLE) Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.318 (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. In addition, per 2 CFR 200.318 (i), the non-Federal entity must maintain records sufficient to detail the history of procurement. Condition: The Township did not utilize federal procurement requirements cited above for the engineering services for the State Clean Water Revolving Fund project. Identification of How Likely Questioned Costs Were Computed: The questioned costs were determined from actual engineering design and construction cost billed (federal portion) during the June 18, 2022 through March 31, 2023 period as summarized from the request for disbursement of funds submitted to EGLE. Known Questioned Costs: $295,854 Context: We tested the procurement of four contracts, 100% of the contracts, and identified one contract that did not follow federal procurement requirements. Cause/Effect: A number of years ago the Township bid engineering services and selected an engineer firm however there were issues with that firm therefore the Township replaced the original engineer with a local engineering firm that they have utilized on other Township projects. Therefore, they did not belief they need to bid engineering services for this project. The Township did not utilize federal procurement requirements to ensure fair and open competition and reasonable cost for engineering services for the State Clean Water Revolving Fund project. Recommendation: We recommend the Township follow federal procurement as required in 2 CFR 200.319 (d) for all contracts reimbursed with federal funds. View of responsible officials and planned corrective action plan: See attached corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 66.458, Environmental Protection Agency. Capitalization Grants for Clean Water State Revolving Funds Federal Award Identification Number and Year: 5749-01, Loan Period 06/18/2022-11/15/2024 Pass-through Entity: Michigan Department of Environment, Great Lakes, and Energy Finance Division - Water Infrastructure Financing Section Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: As a precondition to receive federal awards, prospective recipients must have effective internal controls over the federal award. As described in 2 CFR, Part 200.303, nonfederal entities must have certain written policies and procedures surrounding the management of their federal awards. Such policies should include procedures for collecting payments of federal funds per 2 CRF 200.305, cash management (i.e., minimizing the time between draws and actual disbursing of federal awards) per 2 CFR 200.302(b)(6), allowable cost per 2 CFR 200.403, and conflict of interest per 2 CFR 200.318. Per 2 CFR 200.319 (d), the non-Federal entity must have written procedures for procurement transactions. Condition: The Township did not have written procedures for cash management, allowable cost or conflict of interest. In addition, the Township procurement policy did not include all necessary items specified in the Uniform Guidance. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None Context: N/A Cause/Effect: The Township was not aware that they were required to have written policies and procedures for the items noted above and was using the grant agreement requirements for guidelines. The Township's controls were not adequate to ensure it followed the federal requirement over these processes. Recommendation: We recommend the Township adopt written policies and procedures over cash management, allowable costs, and conflicts of interest. In addition, we recommend that management review and modify the procedure policy to include all the necessary items outline in the Uniform Guidance. View of responsible officials and planned corrective action plan: See attached corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 66.458, Environmental Protection Agency. Capitalization Grants for Clean Water State Revolving Funds Federal Award Identification Number and Year: 5749-01, Loan Period 06/18/2022-11/15/2024 Pass-through Entity: Michigan Department of Environment, Great Lakes, and Energy Finance Division - Water Infrastructure Financing Section Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: A nonfederal entity must have adequate procedures in place to verify that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded (2 CFR sections 200.212 and 200.318(h); 2 CRF section 180.300; 48 CFR section 52.209-6). Condition: During procurement testing of the Capitalization Grants for Clean Water Revolving Funds, we noted that the Township did not have documentation that sam.gov was reviewed to ensure the contractors were not suspended or debarred. The only consideration of debarment or suspension appears to be requirement to have contractors provide a signed certification to the effect of not being debarred or suspended from participation in federally funded projects. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None. Subsequently, the sam.gov was reviewed to ensure that the contractors were not suspended or debarred. Context: None of the four contractors utilized for the Capitalization Grants for Clean Water Revolving Funds project were evaluated. Cause/Effect: The lead engineer left the employment of the engineering company, and they believe that he would have tested for suspension or debarment at the time of initiating the contracts, however no documentation could be located. The Township did not have controls in place to comply with suspension and debarment evaluation requirements. Recommendation: We recommend the Township implement adequate controls to ensure verification of debarment, suspension, or exclusion takes place before entering into covered transactions. View of responsible officials and planned corrective action plan: See attached corrective action plan.
Finding Type: Significant Deficiency Condition: Our audit found that JTCHS did not have adequate internal controls to ensure compliance with the federal procurement requirements. Specifically, JTCHS's procurement policies did not set a simplified acquisition threshold that was compliant with federal requirements. Criteria: Per 2 CFR 200.318(a), General Procurement Standards, “The non-Federal entity must have and use documented procurement procedures consistent with State, local, and tribal laws and regulations 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. Cause: JTCHS was not aware that its formal written procurement policy was not in compliance with the federal guidelines. Effect: JTCHS was not in compliance with Federal requirements relating to procurement policy. Recommendation: JTCHS should review federal procurement guidelines and revise its procurement policy to be in compliance with the federal procurement guidelines. Responsible Official’s Response: Management will review adopt a procurement policy in accordance with the Uniform Guidance. Planned Implementation Date of Corrective Action Plan: Management has started revising its policy and expects to have a revised procurement policy during fiscal year ending January 31, 2024.
Finding Type: Significant Deficiency Condition: Our audit found that JTCHS did not have adequate internal controls to ensure compliance with the federal procurement requirements. Specifically, JTCHS's procurement policies did not set a simplified acquisition threshold that was compliant with federal requirements. Criteria: Per 2 CFR 200.318(a), General Procurement Standards, “The non-Federal entity must have and use documented procurement procedures consistent with State, local, and tribal laws and regulations 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. Cause: JTCHS was not aware that its formal written procurement policy was not in compliance with the federal guidelines. Effect: JTCHS was not in compliance with Federal requirements relating to procurement policy. Recommendation: JTCHS should review federal procurement guidelines and revise its procurement policy to be in compliance with the federal procurement guidelines. Responsible Official’s Response: Management will review adopt a procurement policy in accordance with the Uniform Guidance. Planned Implementation Date of Corrective Action Plan: Management has started revising its policy and expects to have a revised procurement policy during fiscal year ending January 31, 2024.
Procurement – Suspension and Debarment Information on Federal Program: U.S. Department of Health COVID-19 Detection and Mitigation of COVID-19 in Confinement Facilities, federal assistance listing number 93.323. Criteria: 2 CFR Sections 200.212, 200.318(h), and 180.300 and 48 CFR Section 52.209-6 state that a non-Federal entity must review that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded from participation in federal award programs. Statement of Condition: During our testing for procurement compliance, it was determined that the New York State Sheriffs’ Association, Inc. did not verify that vendors charged to the major program are not debarred, suspended, or otherwise excluded from participation in federal award programs. Questioned Cost: None Statement of Cause: Management was not aware of the requirement to review an entity’s status. Statement of Effect: The New York State Sheriffs’ Association, Inc. is not in compliance with 2 CFR Sections 200.212, 200.318(h), and 180.300 and 48 CFR Section 52.209-6. As a result, the Association could enter into covered transactions with entities that are debarred, suspended, or otherwise excluded from participation in federal award programs. Repeat Finding: No Recommendation: We recommend management review and document the verification that vendors are not debarred, suspended, or otherwise excluded from participation in federal award programs. Views of the Responsible Officials and Planned Corrective Actions: Vendors will be reviewed and documented that they are not debarred, suspended, or otherwise excluded from participation in federal award programs by use of the System for Award Management (SAM), the Official U.S. Government system. [New procedure implemented] Perspective Information: There was one vendor in excess of the $25,000 threshold which was reviewed to determine eligibility for participation noting they are not debarred, suspended, or otherwise excluded from participation in federal award programs.
City of Renton January 1, 2022 through December 31, 2022 2022-001 The City’s internal controls were inadequate for ensuring compliance with procurement and suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning andConstruction Grant Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: STPUL-1615(005) and HIPULSTP-9917(037) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2022, the City spent $3,658,423 in federal grant funds awarded by the Federal Highway Administration and passed through by the Washington State Department of Transportation. This program gives funding to help state and local government agencies plan and develop an integrated, interconnected transportation system. The City used program funding on seven projects during fiscal year 2022. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Our audit found the City’s internal controls were inadequate for ensuring compliance with the following federal requirements. Procurement Federal regulations require recipients to follow their own written procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must conform to federal procurement thresholds and procedures to ensure recipients follow the most restrictive of federal, state or local procurement methods when using federal funds. Although the City implemented a procurement policy, it does not conform to the most restrictive methods and thresholds for procuring personal services. Additionally, the City’s internal controls were ineffective for ensuring its compliance with federal procurement requirements for personal services. Suspension and debarment Federal regulations prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the City contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors are not been suspended, debarred or otherwise excluded from participating in federal programs. The City may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The City must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. The City’s internal controls were inadequate for ensuring staff verified the suspension and debarment status for all covered transactions. Specifically, the City was unable to provide documentation demonstrating one personal services contractor was not suspended or debarred from participating in federal programs before entering into the agreement. We consider these control deficiencies to be material weaknesses. Cause of Condition Procurement City staff did not know the federal requirement for procuring personal services was more restrictive than local and state requirements. Further, staff mistakenly thought that legal services were not subject to federal procurement requirements. Suspension and debarment City staff were aware of the requirement, but they could not locate documentation to show that one contractor’s suspension and debarment status was verified. Effect of Condition Procurement Without updated written procedures, the City is at greater risk of noncompliance with following the most restrictive procurement methods when procuring contractors paid all or in part with federal funds. In 2021, the City awarded two personal services contracts for legal services, totaling $365,000, without competitively procuring them. Without effective internal controls, the City cannot ensure it allowed for full and open competition, received the best price, and complied with federal procurement requirements. Suspension and debarment The City was unable to demonstrate it had obtained a written certification, inserted a clause into the agreement, or maintained support of checking SAM.gov to verify one contractor it paid $268,846 in 2022 was not suspended or debarred. Without verification, the City increases it risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any program funds the City made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. The City subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the City establish internal controls to ensure it meets federal procurement and suspension and debarment requirements by: • Updating its written policies and procedures to conform to Uniform Guidance (2 CFR 200.318-327) • Procuring goods and services in accordance with federal regulations, state law, and its own procurement policies and procedures • Verifying that all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them or charging costs to a federal award, and maintain documentation demonstrating compliance with this requirement City’s Response Auditor’s Remarks We appreciate the City’s commitment to resolving the finding, and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by non-federal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.
City of Renton January 1, 2022 through December 31, 2022 2022-001 The City’s internal controls were inadequate for ensuring compliance with procurement and suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning andConstruction Grant Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: STPUL-1615(005) and HIPULSTP-9917(037) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2022, the City spent $3,658,423 in federal grant funds awarded by the Federal Highway Administration and passed through by the Washington State Department of Transportation. This program gives funding to help state and local government agencies plan and develop an integrated, interconnected transportation system. The City used program funding on seven projects during fiscal year 2022. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Our audit found the City’s internal controls were inadequate for ensuring compliance with the following federal requirements. Procurement Federal regulations require recipients to follow their own written procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must conform to federal procurement thresholds and procedures to ensure recipients follow the most restrictive of federal, state or local procurement methods when using federal funds. Although the City implemented a procurement policy, it does not conform to the most restrictive methods and thresholds for procuring personal services. Additionally, the City’s internal controls were ineffective for ensuring its compliance with federal procurement requirements for personal services. Suspension and debarment Federal regulations prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the City contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors are not been suspended, debarred or otherwise excluded from participating in federal programs. The City may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The City must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. The City’s internal controls were inadequate for ensuring staff verified the suspension and debarment status for all covered transactions. Specifically, the City was unable to provide documentation demonstrating one personal services contractor was not suspended or debarred from participating in federal programs before entering into the agreement. We consider these control deficiencies to be material weaknesses. Cause of Condition Procurement City staff did not know the federal requirement for procuring personal services was more restrictive than local and state requirements. Further, staff mistakenly thought that legal services were not subject to federal procurement requirements. Suspension and debarment City staff were aware of the requirement, but they could not locate documentation to show that one contractor’s suspension and debarment status was verified. Effect of Condition Procurement Without updated written procedures, the City is at greater risk of noncompliance with following the most restrictive procurement methods when procuring contractors paid all or in part with federal funds. In 2021, the City awarded two personal services contracts for legal services, totaling $365,000, without competitively procuring them. Without effective internal controls, the City cannot ensure it allowed for full and open competition, received the best price, and complied with federal procurement requirements. Suspension and debarment The City was unable to demonstrate it had obtained a written certification, inserted a clause into the agreement, or maintained support of checking SAM.gov to verify one contractor it paid $268,846 in 2022 was not suspended or debarred. Without verification, the City increases it risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any program funds the City made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. The City subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the City establish internal controls to ensure it meets federal procurement and suspension and debarment requirements by: • Updating its written policies and procedures to conform to Uniform Guidance (2 CFR 200.318-327) • Procuring goods and services in accordance with federal regulations, state law, and its own procurement policies and procedures • Verifying that all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them or charging costs to a federal award, and maintain documentation demonstrating compliance with this requirement City’s Response Auditor’s Remarks We appreciate the City’s commitment to resolving the finding, and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by non-federal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.
City of Renton January 1, 2022 through December 31, 2022 2022-001 The City’s internal controls were inadequate for ensuring compliance with procurement and suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning andConstruction Grant Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: STPUL-1615(005) and HIPULSTP-9917(037) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2022, the City spent $3,658,423 in federal grant funds awarded by the Federal Highway Administration and passed through by the Washington State Department of Transportation. This program gives funding to help state and local government agencies plan and develop an integrated, interconnected transportation system. The City used program funding on seven projects during fiscal year 2022. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Our audit found the City’s internal controls were inadequate for ensuring compliance with the following federal requirements. Procurement Federal regulations require recipients to follow their own written procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must conform to federal procurement thresholds and procedures to ensure recipients follow the most restrictive of federal, state or local procurement methods when using federal funds. Although the City implemented a procurement policy, it does not conform to the most restrictive methods and thresholds for procuring personal services. Additionally, the City’s internal controls were ineffective for ensuring its compliance with federal procurement requirements for personal services. Suspension and debarment Federal regulations prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the City contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors are not been suspended, debarred or otherwise excluded from participating in federal programs. The City may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The City must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. The City’s internal controls were inadequate for ensuring staff verified the suspension and debarment status for all covered transactions. Specifically, the City was unable to provide documentation demonstrating one personal services contractor was not suspended or debarred from participating in federal programs before entering into the agreement. We consider these control deficiencies to be material weaknesses. Cause of Condition Procurement City staff did not know the federal requirement for procuring personal services was more restrictive than local and state requirements. Further, staff mistakenly thought that legal services were not subject to federal procurement requirements. Suspension and debarment City staff were aware of the requirement, but they could not locate documentation to show that one contractor’s suspension and debarment status was verified. Effect of Condition Procurement Without updated written procedures, the City is at greater risk of noncompliance with following the most restrictive procurement methods when procuring contractors paid all or in part with federal funds. In 2021, the City awarded two personal services contracts for legal services, totaling $365,000, without competitively procuring them. Without effective internal controls, the City cannot ensure it allowed for full and open competition, received the best price, and complied with federal procurement requirements. Suspension and debarment The City was unable to demonstrate it had obtained a written certification, inserted a clause into the agreement, or maintained support of checking SAM.gov to verify one contractor it paid $268,846 in 2022 was not suspended or debarred. Without verification, the City increases it risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any program funds the City made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. The City subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the City establish internal controls to ensure it meets federal procurement and suspension and debarment requirements by: • Updating its written policies and procedures to conform to Uniform Guidance (2 CFR 200.318-327) • Procuring goods and services in accordance with federal regulations, state law, and its own procurement policies and procedures • Verifying that all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them or charging costs to a federal award, and maintain documentation demonstrating compliance with this requirement City’s Response Auditor’s Remarks We appreciate the City’s commitment to resolving the finding, and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by non-federal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.
City of Renton January 1, 2022 through December 31, 2022 2022-001 The City’s internal controls were inadequate for ensuring compliance with procurement and suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning andConstruction Grant Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: STPUL-1615(005) and HIPULSTP-9917(037) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2022, the City spent $3,658,423 in federal grant funds awarded by the Federal Highway Administration and passed through by the Washington State Department of Transportation. This program gives funding to help state and local government agencies plan and develop an integrated, interconnected transportation system. The City used program funding on seven projects during fiscal year 2022. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Our audit found the City’s internal controls were inadequate for ensuring compliance with the following federal requirements. Procurement Federal regulations require recipients to follow their own written procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must conform to federal procurement thresholds and procedures to ensure recipients follow the most restrictive of federal, state or local procurement methods when using federal funds. Although the City implemented a procurement policy, it does not conform to the most restrictive methods and thresholds for procuring personal services. Additionally, the City’s internal controls were ineffective for ensuring its compliance with federal procurement requirements for personal services. Suspension and debarment Federal regulations prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the City contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors are not been suspended, debarred or otherwise excluded from participating in federal programs. The City may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The City must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. The City’s internal controls were inadequate for ensuring staff verified the suspension and debarment status for all covered transactions. Specifically, the City was unable to provide documentation demonstrating one personal services contractor was not suspended or debarred from participating in federal programs before entering into the agreement. We consider these control deficiencies to be material weaknesses. Cause of Condition Procurement City staff did not know the federal requirement for procuring personal services was more restrictive than local and state requirements. Further, staff mistakenly thought that legal services were not subject to federal procurement requirements. Suspension and debarment City staff were aware of the requirement, but they could not locate documentation to show that one contractor’s suspension and debarment status was verified. Effect of Condition Procurement Without updated written procedures, the City is at greater risk of noncompliance with following the most restrictive procurement methods when procuring contractors paid all or in part with federal funds. In 2021, the City awarded two personal services contracts for legal services, totaling $365,000, without competitively procuring them. Without effective internal controls, the City cannot ensure it allowed for full and open competition, received the best price, and complied with federal procurement requirements. Suspension and debarment The City was unable to demonstrate it had obtained a written certification, inserted a clause into the agreement, or maintained support of checking SAM.gov to verify one contractor it paid $268,846 in 2022 was not suspended or debarred. Without verification, the City increases it risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any program funds the City made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. The City subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the City establish internal controls to ensure it meets federal procurement and suspension and debarment requirements by: • Updating its written policies and procedures to conform to Uniform Guidance (2 CFR 200.318-327) • Procuring goods and services in accordance with federal regulations, state law, and its own procurement policies and procedures • Verifying that all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them or charging costs to a federal award, and maintain documentation demonstrating compliance with this requirement City’s Response Auditor’s Remarks We appreciate the City’s commitment to resolving the finding, and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by non-federal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.
City of Renton January 1, 2022 through December 31, 2022 2022-001 The City’s internal controls were inadequate for ensuring compliance with procurement and suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning andConstruction Grant Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: STPUL-1615(005) and HIPULSTP-9917(037) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2022, the City spent $3,658,423 in federal grant funds awarded by the Federal Highway Administration and passed through by the Washington State Department of Transportation. This program gives funding to help state and local government agencies plan and develop an integrated, interconnected transportation system. The City used program funding on seven projects during fiscal year 2022. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Our audit found the City’s internal controls were inadequate for ensuring compliance with the following federal requirements. Procurement Federal regulations require recipients to follow their own written procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must conform to federal procurement thresholds and procedures to ensure recipients follow the most restrictive of federal, state or local procurement methods when using federal funds. Although the City implemented a procurement policy, it does not conform to the most restrictive methods and thresholds for procuring personal services. Additionally, the City’s internal controls were ineffective for ensuring its compliance with federal procurement requirements for personal services. Suspension and debarment Federal regulations prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the City contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors are not been suspended, debarred or otherwise excluded from participating in federal programs. The City may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The City must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. The City’s internal controls were inadequate for ensuring staff verified the suspension and debarment status for all covered transactions. Specifically, the City was unable to provide documentation demonstrating one personal services contractor was not suspended or debarred from participating in federal programs before entering into the agreement. We consider these control deficiencies to be material weaknesses. Cause of Condition Procurement City staff did not know the federal requirement for procuring personal services was more restrictive than local and state requirements. Further, staff mistakenly thought that legal services were not subject to federal procurement requirements. Suspension and debarment City staff were aware of the requirement, but they could not locate documentation to show that one contractor’s suspension and debarment status was verified. Effect of Condition Procurement Without updated written procedures, the City is at greater risk of noncompliance with following the most restrictive procurement methods when procuring contractors paid all or in part with federal funds. In 2021, the City awarded two personal services contracts for legal services, totaling $365,000, without competitively procuring them. Without effective internal controls, the City cannot ensure it allowed for full and open competition, received the best price, and complied with federal procurement requirements. Suspension and debarment The City was unable to demonstrate it had obtained a written certification, inserted a clause into the agreement, or maintained support of checking SAM.gov to verify one contractor it paid $268,846 in 2022 was not suspended or debarred. Without verification, the City increases it risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any program funds the City made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. The City subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the City establish internal controls to ensure it meets federal procurement and suspension and debarment requirements by: • Updating its written policies and procedures to conform to Uniform Guidance (2 CFR 200.318-327) • Procuring goods and services in accordance with federal regulations, state law, and its own procurement policies and procedures • Verifying that all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them or charging costs to a federal award, and maintain documentation demonstrating compliance with this requirement City’s Response Auditor’s Remarks We appreciate the City’s commitment to resolving the finding, and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by non-federal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.
City of Renton January 1, 2022 through December 31, 2022 2022-001 The City’s internal controls were inadequate for ensuring compliance with procurement and suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning andConstruction Grant Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: STPUL-1615(005) and HIPULSTP-9917(037) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2022, the City spent $3,658,423 in federal grant funds awarded by the Federal Highway Administration and passed through by the Washington State Department of Transportation. This program gives funding to help state and local government agencies plan and develop an integrated, interconnected transportation system. The City used program funding on seven projects during fiscal year 2022. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Our audit found the City’s internal controls were inadequate for ensuring compliance with the following federal requirements. Procurement Federal regulations require recipients to follow their own written procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must conform to federal procurement thresholds and procedures to ensure recipients follow the most restrictive of federal, state or local procurement methods when using federal funds. Although the City implemented a procurement policy, it does not conform to the most restrictive methods and thresholds for procuring personal services. Additionally, the City’s internal controls were ineffective for ensuring its compliance with federal procurement requirements for personal services. Suspension and debarment Federal regulations prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the City contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors are not been suspended, debarred or otherwise excluded from participating in federal programs. The City may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The City must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. The City’s internal controls were inadequate for ensuring staff verified the suspension and debarment status for all covered transactions. Specifically, the City was unable to provide documentation demonstrating one personal services contractor was not suspended or debarred from participating in federal programs before entering into the agreement. We consider these control deficiencies to be material weaknesses. Cause of Condition Procurement City staff did not know the federal requirement for procuring personal services was more restrictive than local and state requirements. Further, staff mistakenly thought that legal services were not subject to federal procurement requirements. Suspension and debarment City staff were aware of the requirement, but they could not locate documentation to show that one contractor’s suspension and debarment status was verified. Effect of Condition Procurement Without updated written procedures, the City is at greater risk of noncompliance with following the most restrictive procurement methods when procuring contractors paid all or in part with federal funds. In 2021, the City awarded two personal services contracts for legal services, totaling $365,000, without competitively procuring them. Without effective internal controls, the City cannot ensure it allowed for full and open competition, received the best price, and complied with federal procurement requirements. Suspension and debarment The City was unable to demonstrate it had obtained a written certification, inserted a clause into the agreement, or maintained support of checking SAM.gov to verify one contractor it paid $268,846 in 2022 was not suspended or debarred. Without verification, the City increases it risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any program funds the City made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. The City subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the City establish internal controls to ensure it meets federal procurement and suspension and debarment requirements by: • Updating its written policies and procedures to conform to Uniform Guidance (2 CFR 200.318-327) • Procuring goods and services in accordance with federal regulations, state law, and its own procurement policies and procedures • Verifying that all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them or charging costs to a federal award, and maintain documentation demonstrating compliance with this requirement City’s Response Auditor’s Remarks We appreciate the City’s commitment to resolving the finding, and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by non-federal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.
City of Renton January 1, 2022 through December 31, 2022 2022-001 The City’s internal controls were inadequate for ensuring compliance with procurement and suspension and debarment requirements. Assistance Listing Number and Title: 20.205 Highway Planning andConstruction Grant Federal Grantor Name: Federal Highway Administration U.S. Department of Transportation Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Transportation Pass-through Award/Contract Number: STPUL-1615(005) and HIPULSTP-9917(037) Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition During fiscal year 2022, the City spent $3,658,423 in federal grant funds awarded by the Federal Highway Administration and passed through by the Washington State Department of Transportation. This program gives funding to help state and local government agencies plan and develop an integrated, interconnected transportation system. The City used program funding on seven projects during fiscal year 2022. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Our audit found the City’s internal controls were inadequate for ensuring compliance with the following federal requirements. Procurement Federal regulations require recipients to follow their own written procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must conform to federal procurement thresholds and procedures to ensure recipients follow the most restrictive of federal, state or local procurement methods when using federal funds. Although the City implemented a procurement policy, it does not conform to the most restrictive methods and thresholds for procuring personal services. Additionally, the City’s internal controls were ineffective for ensuring its compliance with federal procurement requirements for personal services. Suspension and debarment Federal regulations prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the City contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors are not been suspended, debarred or otherwise excluded from participating in federal programs. The City may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The City must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. The City’s internal controls were inadequate for ensuring staff verified the suspension and debarment status for all covered transactions. Specifically, the City was unable to provide documentation demonstrating one personal services contractor was not suspended or debarred from participating in federal programs before entering into the agreement. We consider these control deficiencies to be material weaknesses. Cause of Condition Procurement City staff did not know the federal requirement for procuring personal services was more restrictive than local and state requirements. Further, staff mistakenly thought that legal services were not subject to federal procurement requirements. Suspension and debarment City staff were aware of the requirement, but they could not locate documentation to show that one contractor’s suspension and debarment status was verified. Effect of Condition Procurement Without updated written procedures, the City is at greater risk of noncompliance with following the most restrictive procurement methods when procuring contractors paid all or in part with federal funds. In 2021, the City awarded two personal services contracts for legal services, totaling $365,000, without competitively procuring them. Without effective internal controls, the City cannot ensure it allowed for full and open competition, received the best price, and complied with federal procurement requirements. Suspension and debarment The City was unable to demonstrate it had obtained a written certification, inserted a clause into the agreement, or maintained support of checking SAM.gov to verify one contractor it paid $268,846 in 2022 was not suspended or debarred. Without verification, the City increases it risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any program funds the City made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. The City subsequently verified the contractor was not suspended or debarred, so we are not questioning costs. Recommendation We recommend the City establish internal controls to ensure it meets federal procurement and suspension and debarment requirements by: • Updating its written policies and procedures to conform to Uniform Guidance (2 CFR 200.318-327) • Procuring goods and services in accordance with federal regulations, state law, and its own procurement policies and procedures • Verifying that all contractors it expects to pay $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them or charging costs to a federal award, and maintain documentation demonstrating compliance with this requirement City’s Response Auditor’s Remarks We appreciate the City’s commitment to resolving the finding, and thank the City for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by non-federal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.
The District did not have adequate internal controls to ensure compliance with federal procurement requirements. Description of Condition The purpose of the Health Center Program is to improve the health of underserved communities and vulnerable populations in the United States by ensuring continued access to comprehensive, culturally competent and quality primary health care services. The District spent $1,468,524 through this program to provide primary and preventive health care services to underserved communities. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations also require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must reflect the most restrictive of applicable federal requirements, state laws or local policies. When using federal funds to purchase goods or services, governments must apply the most restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase or project. The District’s adopted policy includes procedures for the purchase of supplies, materials, equipment and services. However, the thresholds do not conform to the most restrictive of $75,000 for public works contracts, and the policy does not include required elements to conform with Uniform Guidance requirements. In addition, the District entered into two contracts for public work projects during the audit period. One contract was for the installation of a modular building for $745,172, and the other was for a clinic renovation for $247,250. Both projects were partially paid with federal funds, and they required competitive bidding. Our audit found the District did not follow proper procurement procedures for these projects to ensure compliance with Uniform Guidance requirements. We consider these deficiencies in internal controls to be a material weakness. Cause of Condition District employees did not know about the policy requirements. Additionally, District officials said that obtaining quotes for these projects was the most economical process because the District has previously experienced difficulties with obtaining contractors within its remote location. Effect of Condition Without written procedures in place, the District is at greater risk of noncompliance with the most restrictive of federal, state, or local procurement methods when procuring contractors paid all or in part with federal funds. Since the District did not comply with federal procurement requirements to formally bid two public work projects, it cannot demonstrate it received the best price for the services provided. Recommendation We recommend the District ensure its written procurement procedures comply with the most restrictive of federal, state or local requirements, as required by Uniform Guidance. We also recommend the District strengthen its internal controls over procuring public work projects to ensure compliance with federal procurement requirements. District’s Response During the planning phase of each project, the District, working closely with its architectural firm, conducted extensive research on available contractors within the region with specific experience in construction for health care practice. It was determined that while there are an adequate number of contractors in the area; there is a robust housing construction trend occurring at present. As a result, contractors with specific experience health care construction conveyed they were not interested in the size of the District project to consider submitting a bid. The project then became a single source with only one vendor interested in submitting a bid for the work proposed. It was not feasible or economical to publicize the solicitation through appropriate periodicals of general circulation and trade press to solicit bids to maximize competition. The procurement for the prefabricated modular building was a unique circumstance where there are a limited number of vendors that can supply the product needed by the District within a reasonable geographic vicinity. The product needed by the District within a reasonable geographic vicinity. The District obtained written proposals from three known supplies of the specialty item for procurement. The request included specifications that defines the item of service needed that allowed for the vendor to properly respond. A cost and price analysis was conducted based on the response from the bids solicited. The final award was based on price as well as the lack of competition due to limited specialty suppliers. For this project, competition was determined inadequate due to the limited number of specialty vendors with the ability to fulfill the District requirements of a prefabricated structure. Therefore, it was not deemed feasible or economical to publicize the solicitation through appropriate periodicals of general circulation and trade presses. Auditor’s Remarks We thank the District for its cooperation and assistance during the audit and will review the status of this issue during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, describes general procurement standard requirements for auditees to follow. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section.
The District did not have adequate internal controls to ensure compliance with federal procurement requirements. Description of Condition The purpose of the Health Center Program is to improve the health of underserved communities and vulnerable populations in the United States by ensuring continued access to comprehensive, culturally competent and quality primary health care services. The District spent $1,468,524 through this program to provide primary and preventive health care services to underserved communities. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations also require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must reflect the most restrictive of applicable federal requirements, state laws or local policies. When using federal funds to purchase goods or services, governments must apply the most restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase or project. The District’s adopted policy includes procedures for the purchase of supplies, materials, equipment and services. However, the thresholds do not conform to the most restrictive of $75,000 for public works contracts, and the policy does not include required elements to conform with Uniform Guidance requirements. In addition, the District entered into two contracts for public work projects during the audit period. One contract was for the installation of a modular building for $745,172, and the other was for a clinic renovation for $247,250. Both projects were partially paid with federal funds, and they required competitive bidding. Our audit found the District did not follow proper procurement procedures for these projects to ensure compliance with Uniform Guidance requirements. We consider these deficiencies in internal controls to be a material weakness. Cause of Condition District employees did not know about the policy requirements. Additionally, District officials said that obtaining quotes for these projects was the most economical process because the District has previously experienced difficulties with obtaining contractors within its remote location. Effect of Condition Without written procedures in place, the District is at greater risk of noncompliance with the most restrictive of federal, state, or local procurement methods when procuring contractors paid all or in part with federal funds. Since the District did not comply with federal procurement requirements to formally bid two public work projects, it cannot demonstrate it received the best price for the services provided. Recommendation We recommend the District ensure its written procurement procedures comply with the most restrictive of federal, state or local requirements, as required by Uniform Guidance. We also recommend the District strengthen its internal controls over procuring public work projects to ensure compliance with federal procurement requirements. District’s Response During the planning phase of each project, the District, working closely with its architectural firm, conducted extensive research on available contractors within the region with specific experience in construction for health care practice. It was determined that while there are an adequate number of contractors in the area; there is a robust housing construction trend occurring at present. As a result, contractors with specific experience health care construction conveyed they were not interested in the size of the District project to consider submitting a bid. The project then became a single source with only one vendor interested in submitting a bid for the work proposed. It was not feasible or economical to publicize the solicitation through appropriate periodicals of general circulation and trade press to solicit bids to maximize competition. The procurement for the prefabricated modular building was a unique circumstance where there are a limited number of vendors that can supply the product needed by the District within a reasonable geographic vicinity. The product needed by the District within a reasonable geographic vicinity. The District obtained written proposals from three known supplies of the specialty item for procurement. The request included specifications that defines the item of service needed that allowed for the vendor to properly respond. A cost and price analysis was conducted based on the response from the bids solicited. The final award was based on price as well as the lack of competition due to limited specialty suppliers. For this project, competition was determined inadequate due to the limited number of specialty vendors with the ability to fulfill the District requirements of a prefabricated structure. Therefore, it was not deemed feasible or economical to publicize the solicitation through appropriate periodicals of general circulation and trade presses. Auditor’s Remarks We thank the District for its cooperation and assistance during the audit and will review the status of this issue during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, describes general procurement standard requirements for auditees to follow. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section.
The District did not have adequate internal controls to ensure compliance with federal procurement requirements. Description of Condition The purpose of the Health Center Program is to improve the health of underserved communities and vulnerable populations in the United States by ensuring continued access to comprehensive, culturally competent and quality primary health care services. The District spent $1,468,524 through this program to provide primary and preventive health care services to underserved communities. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations also require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must reflect the most restrictive of applicable federal requirements, state laws or local policies. When using federal funds to purchase goods or services, governments must apply the most restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase or project. The District’s adopted policy includes procedures for the purchase of supplies, materials, equipment and services. However, the thresholds do not conform to the most restrictive of $75,000 for public works contracts, and the policy does not include required elements to conform with Uniform Guidance requirements. In addition, the District entered into two contracts for public work projects during the audit period. One contract was for the installation of a modular building for $745,172, and the other was for a clinic renovation for $247,250. Both projects were partially paid with federal funds, and they required competitive bidding. Our audit found the District did not follow proper procurement procedures for these projects to ensure compliance with Uniform Guidance requirements. We consider these deficiencies in internal controls to be a material weakness. Cause of Condition District employees did not know about the policy requirements. Additionally, District officials said that obtaining quotes for these projects was the most economical process because the District has previously experienced difficulties with obtaining contractors within its remote location. Effect of Condition Without written procedures in place, the District is at greater risk of noncompliance with the most restrictive of federal, state, or local procurement methods when procuring contractors paid all or in part with federal funds. Since the District did not comply with federal procurement requirements to formally bid two public work projects, it cannot demonstrate it received the best price for the services provided. Recommendation We recommend the District ensure its written procurement procedures comply with the most restrictive of federal, state or local requirements, as required by Uniform Guidance. We also recommend the District strengthen its internal controls over procuring public work projects to ensure compliance with federal procurement requirements. District’s Response During the planning phase of each project, the District, working closely with its architectural firm, conducted extensive research on available contractors within the region with specific experience in construction for health care practice. It was determined that while there are an adequate number of contractors in the area; there is a robust housing construction trend occurring at present. As a result, contractors with specific experience health care construction conveyed they were not interested in the size of the District project to consider submitting a bid. The project then became a single source with only one vendor interested in submitting a bid for the work proposed. It was not feasible or economical to publicize the solicitation through appropriate periodicals of general circulation and trade press to solicit bids to maximize competition. The procurement for the prefabricated modular building was a unique circumstance where there are a limited number of vendors that can supply the product needed by the District within a reasonable geographic vicinity. The product needed by the District within a reasonable geographic vicinity. The District obtained written proposals from three known supplies of the specialty item for procurement. The request included specifications that defines the item of service needed that allowed for the vendor to properly respond. A cost and price analysis was conducted based on the response from the bids solicited. The final award was based on price as well as the lack of competition due to limited specialty suppliers. For this project, competition was determined inadequate due to the limited number of specialty vendors with the ability to fulfill the District requirements of a prefabricated structure. Therefore, it was not deemed feasible or economical to publicize the solicitation through appropriate periodicals of general circulation and trade presses. Auditor’s Remarks We thank the District for its cooperation and assistance during the audit and will review the status of this issue during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, describes general procurement standard requirements for auditees to follow. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section.
The District did not have adequate internal controls to ensure compliance with federal procurement requirements. Description of Condition The purpose of the Health Center Program is to improve the health of underserved communities and vulnerable populations in the United States by ensuring continued access to comprehensive, culturally competent and quality primary health care services. The District spent $1,468,524 through this program to provide primary and preventive health care services to underserved communities. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Federal regulations also require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR 200.318-327. The procedures must reflect the most restrictive of applicable federal requirements, state laws or local policies. When using federal funds to purchase goods or services, governments must apply the most restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the estimated cost of the purchase or project. The District’s adopted policy includes procedures for the purchase of supplies, materials, equipment and services. However, the thresholds do not conform to the most restrictive of $75,000 for public works contracts, and the policy does not include required elements to conform with Uniform Guidance requirements. In addition, the District entered into two contracts for public work projects during the audit period. One contract was for the installation of a modular building for $745,172, and the other was for a clinic renovation for $247,250. Both projects were partially paid with federal funds, and they required competitive bidding. Our audit found the District did not follow proper procurement procedures for these projects to ensure compliance with Uniform Guidance requirements. We consider these deficiencies in internal controls to be a material weakness. Cause of Condition District employees did not know about the policy requirements. Additionally, District officials said that obtaining quotes for these projects was the most economical process because the District has previously experienced difficulties with obtaining contractors within its remote location. Effect of Condition Without written procedures in place, the District is at greater risk of noncompliance with the most restrictive of federal, state, or local procurement methods when procuring contractors paid all or in part with federal funds. Since the District did not comply with federal procurement requirements to formally bid two public work projects, it cannot demonstrate it received the best price for the services provided. Recommendation We recommend the District ensure its written procurement procedures comply with the most restrictive of federal, state or local requirements, as required by Uniform Guidance. We also recommend the District strengthen its internal controls over procuring public work projects to ensure compliance with federal procurement requirements. District’s Response During the planning phase of each project, the District, working closely with its architectural firm, conducted extensive research on available contractors within the region with specific experience in construction for health care practice. It was determined that while there are an adequate number of contractors in the area; there is a robust housing construction trend occurring at present. As a result, contractors with specific experience health care construction conveyed they were not interested in the size of the District project to consider submitting a bid. The project then became a single source with only one vendor interested in submitting a bid for the work proposed. It was not feasible or economical to publicize the solicitation through appropriate periodicals of general circulation and trade press to solicit bids to maximize competition. The procurement for the prefabricated modular building was a unique circumstance where there are a limited number of vendors that can supply the product needed by the District within a reasonable geographic vicinity. The product needed by the District within a reasonable geographic vicinity. The District obtained written proposals from three known supplies of the specialty item for procurement. The request included specifications that defines the item of service needed that allowed for the vendor to properly respond. A cost and price analysis was conducted based on the response from the bids solicited. The final award was based on price as well as the lack of competition due to limited specialty suppliers. For this project, competition was determined inadequate due to the limited number of specialty vendors with the ability to fulfill the District requirements of a prefabricated structure. Therefore, it was not deemed feasible or economical to publicize the solicitation through appropriate periodicals of general circulation and trade presses. Auditor’s Remarks We thank the District for its cooperation and assistance during the audit and will review the status of this issue during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 318, describes general procurement standard requirements for auditees to follow. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section.
U.S. Department of the Treasury State of New Jersey Department of Community Affairs COVID-19 Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal Award Number and Years: G2022-09 (03/02/2021 – 12/31/2024) Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample Repeat Finding: No Finding Type: Material Weakness, Material Non-compliance Criteria Reporting Per 2 CFR 200.502, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants. Further, the Uniform Guidance compliance supplement notes, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the federal awarding agency. Also, in accordance with the grant agreement and the reporting requirements for the State of New Jersey Department of Community Affairs, direct grants and pass-through funds are fulfilled utilizing an advanced payment method and tracking reports. The grantee shall submit quarterly financial reports, in a format to be provided by the Department, and including the number of government full-time employees responding to COVID-19 as supported by this funding. The reports are prepared and submitted to allow for relevant and reliable information to be provided to the Federal government or State of New Jersey for tracking purposes. The reports are the source documents for the grantee to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the grantee’s financial statements in accordance with 2 CFR 200.502, Basis for determining Federal awards expended, for the SEFA. Procurement 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. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). In accordance with the grant agreement and the reporting requirements for the State of New Jersey Department of Community Affairs, recipients may use award funds to enter into contracts to procure goods and services necessary to implement one or more of the eligible purposes outlined in sections 602(c) and 603(c) of the Act and Treasury’s Interim Final Rule and Final Rule. As such, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. Under the program, St. Joseph’s Health, Inc. must follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. Additionally, in accordance with Federal requirements, a non-Federal entity shall maintain internal controls over Federal programs designed to provide reasonable assurance that transactions are executed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and material effect on a Federal program. Condition and Context Reporting On a quarterly basis, St. Joseph’s Health, Inc. (the System) prepares and reports to the State of New Jersey Department of Community Affairs (the Department) the program expenditures for Federal funding amounts on the tracking report of expenditures, which are then used to prepare the annual SEFA in conjunction with the general ledger detail at the end of the fiscal year. While the expenditures per the SEFA as prepared by the System was accurate and the quarterly reporting was accepted by the State, the System’s expenditures per the report of expenditures were based upon purchase order amounts, which includes expenditures that were incurred subsequent to year-end. Procurement The System has procurement policies and guidelines that are in accordance with the respective provisions of the Uniform Guidance. The System contracted with multiple vendors for several projects under the G2022-09 grant that were above the micro purchase threshold of $10,000, but below the simplified acquisition threshold of $250,000. However, the System did not obtain multiple quotes from different vendors to encourage fair competition in the market as per the System’s prescribed procurement policies and guidelines. The vendors were not suspended or debarred and the associated expenditures with these vendors incurred in fiscal year 2022 were determined to be allowable. The System’s policies and procedures to ensure compliance with the above compliance requirements did not include certain internal controls that were designed properly and operating effectively to ensure that the System’s report of expenditures submitted to the Department includes a reconciliation between incurred expenditures and purchase order balances or obtained the necessary quotes from potential bidders for procurements over the micro purchase threshold. Cause Management’s review of the submitted tracking report of expenditures did not identify the need for a reconciliation of incurred expenditures and purchase order balances reported to the Department and as such, as there is a variance between the amounts reported on the SEFA and the amounts reported to the Department on the quarterly reports of approximately $2.2 million. Additionally, they System did not retain or obtain the required documentation for procurements entered into with vendors for the grant in accordance with the System’s procurement policies and guidelines. Effect The System had a material variance in the amount of expenditures reported to the Department as compared to the SEFA, as well as did not comply with Federal regulations or its own policies and guidelines for procurement transactions and related document retention. Questioned costs None Recommendation Reporting We recommend that the System strengthen its processes and internal controls to ensure the tracking report of expenditures provided to the Department has a reconciliation of the amount of expenditures incurred in the period based upon the general ledger and accounting records, used to prepare the annual SEFA, as compared to the purchase order balances. Procurement We recommend that the System strengthen its processes and internal controls to ensure the System obtains and retains the required documentation for each procurement based upon the type of procurement and dollar thresholds. View of Responsible Official Management agrees with the auditor’s recommendation and will strengthen its processes and internal controls to ensure the report of expenditures provided to the Department has a reconciliation of the amount of expenditures incurred in the period compared to the purchase order balances. In addition, Management will strengthen its processes and internal controls to ensure the System obtains and retains the required documentation for each procurement based upon the type of procurement and dollar thresholds.
Criteria or specific requirement: The Council should have a formal procurement policy to guide the Council when entering into covered transactions, including all components identified in 2 CFR 200.318. Condition: The Council had five expenses applied to the grant in excess of the micro-purchase threshold but did not have a procurement policy that identified what the micro-purchase threshold was, as well as other acceptable procurement methods and thresholds. Questioned costs: None Context: Policies were not in place for procurement a, and the Organization entered into five transactions in excess of the micro purchase threshold for which price or rate quotations were not obtained from multiple vendors. Management indicated that multiple bids were not received because the desired services were only available from a single source, but this was not documented. Cause: Management Oversight Effect: The effect of not having a formal procurement policy would be noncompliance with 2 CFR 200.318. Repeat finding: Yes Recommendation: It is recommended that the Council supplement its procurement policy to address requirements specific to federal awards. Views of responsible officials: There is no disagreement with the audit finding.
2022-001 The District’s internal controls were inadequate for ensuring compliance with federal requirements for procurement, and suspension and debarment requirements. Assistance Listing Number and Title: 10.760- Water and Waste Disposal Systems for Rural Communities Federal Grantor Name: U.S. Department of Agriculture, Rural Utilities Service Federal Award/Contract Number: N/A Pass-through Entity Name: Rural Utilities Service, Washington State Department of Agriculture Pass-through Award/Contract Number: 91/01, 91/02, and 91/03 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Water and Waste Disposal Systems for Rural Communities program awards direct loans, loan guarantees, and project grants for new and improved water and waste disposal systems serving rural areas where financing is not available from commercial sources at reasonable rates and terms. The program is authorized to provide loan and grant assistance to eligible applicants for water and waste disposal facilities in rural and incorporated areas up to 10,000 people. In 2022, the District spent $1,041,712 in federal funding to replace its water distribution system. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Procurement Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. The procedures must reflect the most restrictive of applicable federal requirements, state laws or local policies. When using federal funds to procure goods and services, governments must apply the more restrictive requirements by obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Although the District has a written procurement policy, it does not reference Uniform Guidance procurement standards set out at 2 CFR 200.318-327 for procurement with federal funds, nor does it reflect most restrictive standard (federal, state, or local) applicable to the procurement method being used. Suspension and Debarment Federal regulations prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the District enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify contractors are not suspended, debarred or otherwise excluded from participating in federal programs. The District may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. Our audit found the District’s internal controls were ineffective for ensuring it verified all contractors were not suspended or debarred. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition Procurement The District was not aware of the requirement to update the procurement policy to conform to the procurement standards in Uniform Guidance. Suspension and Debarment The District does not typically receive significant federal grants and relied on guidance from its contracted consultant. The District incorrectly thought the contract included the required certification clause. Effect of Condition Procurement Although the District did not update its written policies, it did comply with federal procurement requirements when it solicited and awarded the public works project. However, without updated written procedures, the District is at greater risk of noncompliance with following the most restrictive procurement methods when procuring contractors paid all or in part with federal funds. Suspension and Debarment Without verification, the District increases its risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any program funds the District made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. The District did not verify the suspension and debarment status for one contractor that was paid $741,915 during the audit period. We subsequently verified the contractor was not suspended or debarred. Therefore, we are not questioning the related costs. Recommendation Procurement We recommend the District update its written procurement policy and procedures that conform with Uniform Guidance standards (2 CFR 200.318-327) for all procurement activities. Suspension and Debarment We recommend the District improve its internal controls to ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them. District’s Response The District will amend its procurement policy to include references to federal standards 2 CFR 200.318-327 for procurement activities that utilize federal funds. Furthermore, the District will also include procedures to ensure that all contractors paid $25,000 with federal funds have not been suspended, debarred, or otherwise restricted from participating in federal programs. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, sections 318 through 327, Procurement Standards, establishes requirements for written procedures.
2022-001 The District’s internal controls were inadequate for ensuring compliance with federal requirements for procurement, and suspension and debarment requirements. Assistance Listing Number and Title: 10.760- Water and Waste Disposal Systems for Rural Communities Federal Grantor Name: U.S. Department of Agriculture, Rural Utilities Service Federal Award/Contract Number: N/A Pass-through Entity Name: Rural Utilities Service, Washington State Department of Agriculture Pass-through Award/Contract Number: 91/01, 91/02, and 91/03 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Water and Waste Disposal Systems for Rural Communities program awards direct loans, loan guarantees, and project grants for new and improved water and waste disposal systems serving rural areas where financing is not available from commercial sources at reasonable rates and terms. The program is authorized to provide loan and grant assistance to eligible applicants for water and waste disposal facilities in rural and incorporated areas up to 10,000 people. In 2022, the District spent $1,041,712 in federal funding to replace its water distribution system. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Procurement Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. The procedures must reflect the most restrictive of applicable federal requirements, state laws or local policies. When using federal funds to procure goods and services, governments must apply the more restrictive requirements by obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Although the District has a written procurement policy, it does not reference Uniform Guidance procurement standards set out at 2 CFR 200.318-327 for procurement with federal funds, nor does it reflect most restrictive standard (federal, state, or local) applicable to the procurement method being used. Suspension and Debarment Federal regulations prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the District enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify contractors are not suspended, debarred or otherwise excluded from participating in federal programs. The District may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. Our audit found the District’s internal controls were ineffective for ensuring it verified all contractors were not suspended or debarred. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition Procurement The District was not aware of the requirement to update the procurement policy to conform to the procurement standards in Uniform Guidance. Suspension and Debarment The District does not typically receive significant federal grants and relied on guidance from its contracted consultant. The District incorrectly thought the contract included the required certification clause. Effect of Condition Procurement Although the District did not update its written policies, it did comply with federal procurement requirements when it solicited and awarded the public works project. However, without updated written procedures, the District is at greater risk of noncompliance with following the most restrictive procurement methods when procuring contractors paid all or in part with federal funds. Suspension and Debarment Without verification, the District increases its risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any program funds the District made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. The District did not verify the suspension and debarment status for one contractor that was paid $741,915 during the audit period. We subsequently verified the contractor was not suspended or debarred. Therefore, we are not questioning the related costs. Recommendation Procurement We recommend the District update its written procurement policy and procedures that conform with Uniform Guidance standards (2 CFR 200.318-327) for all procurement activities. Suspension and Debarment We recommend the District improve its internal controls to ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them. District’s Response The District will amend its procurement policy to include references to federal standards 2 CFR 200.318-327 for procurement activities that utilize federal funds. Furthermore, the District will also include procedures to ensure that all contractors paid $25,000 with federal funds have not been suspended, debarred, or otherwise restricted from participating in federal programs. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, sections 318 through 327, Procurement Standards, establishes requirements for written procedures.
2022-001 The District’s internal controls were inadequate for ensuring compliance with federal requirements for procurement, and suspension and debarment requirements. Assistance Listing Number and Title: 10.760- Water and Waste Disposal Systems for Rural Communities Federal Grantor Name: U.S. Department of Agriculture, Rural Utilities Service Federal Award/Contract Number: N/A Pass-through Entity Name: Rural Utilities Service, Washington State Department of Agriculture Pass-through Award/Contract Number: 91/01, 91/02, and 91/03 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Description of Condition The Water and Waste Disposal Systems for Rural Communities program awards direct loans, loan guarantees, and project grants for new and improved water and waste disposal systems serving rural areas where financing is not available from commercial sources at reasonable rates and terms. The program is authorized to provide loan and grant assistance to eligible applicants for water and waste disposal facilities in rural and incorporated areas up to 10,000 people. In 2022, the District spent $1,041,712 in federal funding to replace its water distribution system. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Procurement Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. The procedures must reflect the most restrictive of applicable federal requirements, state laws or local policies. When using federal funds to procure goods and services, governments must apply the more restrictive requirements by obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. Although the District has a written procurement policy, it does not reference Uniform Guidance procurement standards set out at 2 CFR 200.318-327 for procurement with federal funds, nor does it reflect most restrictive standard (federal, state, or local) applicable to the procurement method being used. Suspension and Debarment Federal regulations prohibit recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the District enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify contractors are not suspended, debarred or otherwise excluded from participating in federal programs. The District may accomplish this verification by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. Our audit found the District’s internal controls were ineffective for ensuring it verified all contractors were not suspended or debarred. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition Procurement The District was not aware of the requirement to update the procurement policy to conform to the procurement standards in Uniform Guidance. Suspension and Debarment The District does not typically receive significant federal grants and relied on guidance from its contracted consultant. The District incorrectly thought the contract included the required certification clause. Effect of Condition Procurement Although the District did not update its written policies, it did comply with federal procurement requirements when it solicited and awarded the public works project. However, without updated written procedures, the District is at greater risk of noncompliance with following the most restrictive procurement methods when procuring contractors paid all or in part with federal funds. Suspension and Debarment Without verification, the District increases its risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any program funds the District made to an ineligible party would be unallowable, and the federal grantor could potentially recover them. The District did not verify the suspension and debarment status for one contractor that was paid $741,915 during the audit period. We subsequently verified the contractor was not suspended or debarred. Therefore, we are not questioning the related costs. Recommendation Procurement We recommend the District update its written procurement policy and procedures that conform with Uniform Guidance standards (2 CFR 200.318-327) for all procurement activities. Suspension and Debarment We recommend the District improve its internal controls to ensure all contractors paid $25,000 or more, all or in part with federal funds, are not suspended or debarred before entering into contracts with them. District’s Response The District will amend its procurement policy to include references to federal standards 2 CFR 200.318-327 for procurement activities that utilize federal funds. Furthermore, the District will also include procedures to ensure that all contractors paid $25,000 with federal funds have not been suspended, debarred, or otherwise restricted from participating in federal programs. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, sections 318 through 327, Procurement Standards, establishes requirements for written procedures.
Finding Number: 2022‐001 Repeat Finding: No Program Name/Assistance Listing Title: COVID‐19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: U.S. Department of Treasury Federal Award Number: ISA‐ARPA‐AZABGC‐042022‐47, GR‐GEER‐AZABGC‐040122‐01 Pass‐Through Agency: Arizona Alliance of Boys and Girls Clubs Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement and Suspension and Debarment 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 §§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. Additionally, non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non‐federal entity enters into a covered transaction with an entity at a lower tier, the non‐federal entity must verify that the entity, as defined in 2 CFR §180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System of Award Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity (2 CFR §180.300). Condition The Club did not have proper internal controls over procurement to ensure compliance with federal regulations and guidelines. Adequate supporting documentation was not maintained to demonstrate compliance with procurement standards. In addition, the Club’s written procurement standards did not align with federal regulations and guidelines. Cause The Club’s internal controls over procurement of goods and services were not adequate. Effect The Club was not in compliance with Federal regulations and guidelines related to procurement. Context During our review of procurement, we noted the following: - The Club does not have a policy or procedure in place that requires a verification check of suspension and debarment for covered transactions. One purchase charged to the program exceeded $25,000; however, the Club did not perform a verification check. Audit procedures determined the vendor was not suspended or debarred. - The Club’s procurement policies did not address §200.321 Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms or §200.322 Domestic preferences for procurements. - For purchases with two vendors exceeding the micro‐purchase threshold but less than the Simplified Acquisition Threshold, the Club did not maintain records sufficient to detail the procurement performed for these vendors. The sample was not intended to be, and was not, a statistically valid sample Recommendation The Club should develop and implement policies and procedures to ensure compliance with federal procurement requirements. Additionally, procurement records should be retained, and should 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. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2022‐001 Repeat Finding: No Program Name/Assistance Listing Title: COVID‐19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: U.S. Department of Treasury Federal Award Number: ISA‐ARPA‐AZABGC‐042022‐47, GR‐GEER‐AZABGC‐040122‐01 Pass‐Through Agency: Arizona Alliance of Boys and Girls Clubs Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement and Suspension and Debarment 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 §§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. Additionally, non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non‐federal entity enters into a covered transaction with an entity at a lower tier, the non‐federal entity must verify that the entity, as defined in 2 CFR §180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System of Award Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity (2 CFR §180.300). Condition The Club did not have proper internal controls over procurement to ensure compliance with federal regulations and guidelines. Adequate supporting documentation was not maintained to demonstrate compliance with procurement standards. In addition, the Club’s written procurement standards did not align with federal regulations and guidelines. Cause The Club’s internal controls over procurement of goods and services were not adequate. Effect The Club was not in compliance with Federal regulations and guidelines related to procurement. Context During our review of procurement, we noted the following: - The Club does not have a policy or procedure in place that requires a verification check of suspension and debarment for covered transactions. One purchase charged to the program exceeded $25,000; however, the Club did not perform a verification check. Audit procedures determined the vendor was not suspended or debarred. - The Club’s procurement policies did not address §200.321 Contracting with small and minority businesses, women's business enterprises, and labor surplus area firms or §200.322 Domestic preferences for procurements. - For purchases with two vendors exceeding the micro‐purchase threshold but less than the Simplified Acquisition Threshold, the Club did not maintain records sufficient to detail the procurement performed for these vendors. The sample was not intended to be, and was not, a statistically valid sample Recommendation The Club should develop and implement policies and procedures to ensure compliance with federal procurement requirements. Additionally, procurement records should be retained, and should 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. Views of Responsible Officials See Corrective Action Plan.
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that the Center did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Center's internal procurement policy. Questioned Costs: None. Context: We noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that the Center did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Center's internal procurement policy. Questioned Costs: None. Context: We noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that the Center did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Center's internal procurement policy. Questioned Costs: None. Context: We noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that the Center did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Center's internal procurement policy. Questioned Costs: None. Context: We noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that the Center did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Center's internal procurement policy. Questioned Costs: None. Context: We noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that the Center did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Center's internal procurement policy. Questioned Costs: None. Context: We noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that the Center did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Center's internal procurement policy. Questioned Costs: None. Context: We noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that the Center did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Center's internal procurement policy. Questioned Costs: None. Context: We noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that the Center did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Center's internal procurement policy. Questioned Costs: None. Context: We noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.