Assistance Listing Number, Federal Agency, and Program Name 59.059, U.S. Small Business Administration, Congressional Grants Federal Award Identification Number and Year - SBAHQ24I0024, 2024 Pass through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.318(i) The entity must maintain records sufficient to detail the history of procurement. These records will include, but are not limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.319(a) 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. 2 CFR 200.320(a)(2)(i) If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the nonfederal entity. Condition - The Organization did not have controls to retain documentation that the procurement process was followed to ensure more than one vendor was reviewed for pricing before selecting the vendor chosen (as required under 2 CFR 320(a)(2)(i)). Questioned Costs - The Organization charged a total of $107,795 to grant SBAHQ24I0024 during 2024 for covered transactions for which there was no supporting documentation to indicate that the services were procured under the requirements above. If Questioned Costs are not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported - Not applicable Identification of How Questioned Costs Were Computed - The amount of the covered transactions charged against grant advances during 2024 Context - Four covered transactions with total expenditures charged to the grants totaling $107,795 were reviewed. The population subject to testing included a total of five covered transactions. Cause and Effect - The Organization's internal controls did not ensure written documentation of procurement procedures or decisions were retained, which resulted in a lack of evidence to support that the procurement policies were followed. Recommendation - The Organization should implement an internal review process of its record retention to ensure that all procurement documentation is appropriately retained in accordance with its formal policies. Views of Responsible Officials and Corrective Action Plan - Management agrees that documentation of the procurement process was not adequately retained. Management will implement controls to ensure proper support of the procurement process is retained. Although the procurement process was not fully documented, management believes its procurement policies were appropriately followed when entering these four covered transactions.
2024-001: Significant Deficiency Over Compliance with Procurement and Suspension and Debarment Federal Program: Highway Planning and Construction and Coronavirus State and Local Fiscal Recovery Funds Federal Assistance Listing Number(s): 20.205 and 21.027 Federal Agency: U.S. Department of Transportation and U.S. Department of Treasury Pass-through Entity: Colorado Department of Transportation (20.205 only) Criteria: 2 CFR 200.319 states that all procurement transactions under the Federal award must be conducted in a manner that provides full and open competition and is consistent with Federal procurement standards. 2 CFR 200.214 states in part that recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations. In addition, 2 CFR 200.303 in part states that a recipient of a Federal award must establish, document, and maintain effective internal control over the Federal award. Condition: We have selected and tested vendors for suspension and debarment with expenditures in excess of $25,000 for the Bridge CR-397 and EMS projects for compliance with suspension and debarment. We identified that two vendors were not properly verified for suspension and debarment prior to the contract execution date. Cause: Internal controls over suspension and debarment were properly designed but not operating effectively to verify that all vendors are in compliance with suspension and debarment. Effect: Our testing identified that the County’s internal controls over compliance with suspension and debarment are not operating effectively, which may cause the County to be out of compliance with Federal and grant requirements. Repeat Finding: No. Recommendation: We recommend that the County re-evaluate the design of internal controls over suspension and debarment to be in compliance with the Federal requirements and the County’s procurement policy/procedures.
FINDING 2024-003 Subject: Water and Waste Disposal Systems for Rural Communities - Procurement Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Numbers and Years (or Other Identifying Numbers): 92-02, 92-03, 92-04, 92-05 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context As part of sound management of the federal award, the City was responsible for implementing a system of internal controls that would ensure compliance with the applicable requirements. The City had not properly designed or implemented such a system, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. The State of Indiana has established a more restrictive threshold of $150,000 for informal procurement methods. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Small purchase procedures require that price or rate quotations must be obtained from an adequate number of qualified sources or documented reasoning to support a single source provider. Two vendors were identified that were paid $10,500 and $59,408, respectively, during the audit period using federal funds under the award, thereby requiring small purchase procedures for both procurements. Both vendors were selected for testing. The City was unable to provide any documentation for either vendor that the procurement method used was appropriate or that the procurement provided full and open competition or rationale to support the determination to limit competition. Additionally, the history of the procurement, including the rationale for the method of procurement, selection of the vendor, and the basis for the price, was not adequately documented for either vendor. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases- (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . (c) Noncompetitive procurement. 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." Cause The vendors in question had been utilized by the City for various services over the course of multiple years, including for several years under this award with the ongoing multi-year project. For continuity purposes, the City chose to limit competition when procuring the services. The City included the requirements for limiting competition in its purchasing policy but did not follow the established policy. Effect Without a proper system of internal controls in place that operated effectively, noncompliance remained undetected. As a result, proper procurement procedures were not adhered to for all vendors. Without following the required methods for procurement, the City could be overpaying for services by not receiving the most competitive pricing. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls to ensure expenditures made from federal awards use the appropriate procurement method and retain the documentation to support the procurement methods used in order to ensure compliance with the terms and conditions of the federal award. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Compliance Requirement Procurement Type of Finding Material Weakness in Internal Control over Compliance, Material Noncompliance Program Port Security Grant Program ALN# 97.056 Federal Agency Department of Homeland Security – Direct Award Federal Award Year 2020, 2021, 2022 and 2023 Grant Number EMW-2020-PU-00079 – IJ#1, IJ#3, IJ #4 EMW-2021-PU-00030 – IJ#1, IJ#3 EMW-2022-PU-00022 – IJ#1, IJ#2, EMW-2023-PU-00164 – IJ#1, IJ#2, IJ#3, IJ#4 EMW-2024-PU-05541 – IJ#4 Questioned Costs $463,460 Criteria - Federal rules require grant recipients to follow strict purchasing standards. This includes seeking fair and open competition when buying goods or services, obtaining bids or quotes once purchases reach certain dollar thresholds, and verifying that vendors are not suspended or barred from receiving federal funds through the SAM.gov system. Federal rules set strict procurement standards that the District must follow: • 2 CFR 200.318 – Requires non-federal entities to maintain oversight to ensure contractors perform in accordance with the terms, conditions, and specifications of their contracts. • 2 CFR 200.319 – Requires full and open competition in all procurement transactions. • 2 CFR 200.320 – Establishes methods of procurement, including micro-purchases, small purchases, sealed bids, competitive proposals, and noncompetitive proposals. • 2 CFR 200.323 – Requires cost or price analysis for procurements above the Simplified Acquisition Threshold. • 2 CFR 200.213 – Requires checks for suspension and debarment (SAM.gov).Under Louisiana law, political subdivisions such as ports are also subject to state purchasing thresholds: (a) $0 – $9,999: Purchases may be made directly but must be reasonable and properly documented. (b) $10,000 – $60,000: At least three (3) telephone or written quotations are required, with documentation kept on file. (c) Over $60,000: A formal advertised public bid process is required in compliance with Louisiana Public Bid Law. For professional services, the District is required to follow competitive selection processes consistent with their policies, Louisiana state law and federal guidance, ensuring fair opportunity, transparency, and reasonable pricing. Condition - The District failed to comply with federal procurement standards in multiple areas, indicating a pervasive breakdown in procurement controls and noncompliance with 2 CFR 200.318–.327. a) The District did not obtain competitive bids for the camera purchases and installation, resulting in questioned costs of $234,217 b) For professional services contracts funded by the PSGP, relating the IT services, engineering and consulting services, and GIS implantation services, the District did not maintain records documenting requests for price quotes or maintain records demonstrating the reasonableness of costs. Resulting in questioned costs of $305,657. c) For all ten (10) vendors tested under the Port Security Grant Program, the District did not retain documentation demonstrating that SAM.gov suspension and debarment verifications were performed prior to award or payment. Cause - The District failed to enforce federally required procurement standards and did not maintain sufficient documentation to demonstrate compliance. This deficiency reflects a significant weakness in procurement oversight and a lack of management attention to ensuring adherence with federal regulations governing competition, cost reasonableness, and vendor selection. Effect - Because the District did not obtain the required bids, quotes, or suspension and debarment checks, it cannot demonstrate compliance with federal procurement standards. This failure increases the risk of waste, favoritism, or contracting with ineligible vendors, and resulted in questioned costs as calculated by the auditor.Recommendation - The District must consistently apply written procurement policies that require competitive bids or price quotes for all purchases and professional services. Documentation of price reasonableness must be retained for every procurement action to ensure compliance with 2 CFR 200.318–.327 The District must document SAM.gov suspension and debarment verification for all vendors and contractors prior to contract execution or payment. This documentation must be maintained in the procurement file. The District must consult with FEMA regarding the allowability of identified questioned costs.
Finding 2025-002: Competitive Proposal Process for Dental Van Procurement (Significant Deficiency) Federal Program: FIP [93.526] Federal Agency: U.S. Department of Health and Human Services (HHS) Criteria: Federal regulations under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200), specifically 2 CFR § 200.319(b) and § 200.320(b), require that all procurement transactions be conducted in a manner providing full and open competition. For a competitive proposal process, the organization must publicly advertise the procurement and include a clear and accurate description of the technical requirements and specifications for the goods or services to be procured. Furthermore, 2 CFR § 200.320(b)(2)(i) requires that proposals be evaluated and a selection made based on established evaluation criteria. These criteria must be clearly stated in the solicitation and must be used as the basis for the selection, ensuring that price is a factor but not the only one. Condition: The organization intended to use a competitive proposal process to procure a van. However, it failed to publicly advertise the request for proposals, limiting the pool of potential vendors to only those known to the organization. Additionally, the request for proposals did not include a complete and accurate list of specifications, nor did it include the evaluation and selection criteria that would be used to assess the proposals. While the organization did obtain three proposals and documented its rationale for selecting a vendor that was not the lowest bidder, the overall process did not meet the standards for full and open competition required by federal regulations. Questioned Costs: None Cause: The organization lacked a clear understanding of the specific requirements for a federal competitive proposal process. There were no written procedures or internal controls in place to ensure all required documentation and steps were followed. This oversight, combined with an over-reliance on informal practices, contributed to the noncompliance. Effect: The non-compliant procurement process increases the risk that the organization paid more than was necessary for the vehicle, which is an inefficient use of federal funds. Context: This procurement was for a significant asset for the program. While the organization has made an attempt to solicit proposals, the process was fundamentally flawed from the outset due to the lack of public advertising, incomplete specifications, and missing evaluation criteria. This is the first time the organization has procured a van with these funds, and the error was an oversight rather than an intentional act of noncompliance. Repeat Finding: No. This is the first time this specific finding has been identified. Recommendation: The organization should immediately develop and implement a comprehensive procurement policy and procedures manual that fully aligns with 2 CFR Part 200. This manual should provide a detailed checklist for all procurement methods, including specific requirements for public advertising, developing clear specifications, and documenting the full evaluation process based on a set of pre-established criteria. Mandatory training on federal procurement regulations should be provided to all staff involved in federal awards management and procurement to ensure they understand the importance of compliance. Management Response: The organization acknowledges the finding. To address this, we are committing to develop and implement a comprehensive procurement policy and procedures manual that strictly aligns with requirements within the Uniform Guidance. This manual will include detailed checklists for all procurement methods, covering public advertising, clear specification development, and the use of pre-established, documented evaluation criteria, followed by mandatory training for all staff involved in procurement.
FINDING 2024-001 Subject: Water and Waste Disposal Systems for Rural Communities - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number or Year (or Other Identifying Number): Interim Financing Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The City did not have an effective system of internal controls over federal award requirements, including procurement and suspension and debarment. The City failed to properly design and implement internal controls, such as appropriate segregation of duties, to ensure compliance and detect or correct noncompliance in a timely manner. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Procurement - Small Purchases During the audit period, the City had six vendors with purchases under the $150,000 threshold that were considered simplified acquisition procurements and over the $10,000 threshold that was considered micro-purchase procurements. All six vendors were selected for testing, and for five of those vendors, the City could not provide the procurement history or the rationale for the method of procurement, the selection of vendor, or the basis for price. The total dollar amount spent with these five vendors during 2024 was $246,055. Procurement - Simplified Acquisitions During the audit period, the City had three vendors with purchases over the $150,000 threshold that were considered simplified acquisition procurements. All three vendors were selected for testing, and for two of those vendors, the City could not provide the procurement history or the rationale for the method of procurement, the selection of vendor, or the basis for price. The total dollar amount spent with these two vendors during 2024 was $2,654,999. Procurement - Policy Per Uniform Guidance, 2 CFR 200.318(a), a non-federal entity that receives federal funds must have and use documented procurement procedures that conform to applicable federal, state, and local laws and regulations. Additionally, state law, such as Indiana Code 5-22, prescribes specific procedures for purchasing supplies and services based on various dollar thresholds. The City did not provide a purchasing policy for review that included the applicable federal regulation, such as procedures to avoid the acquisition of unnecessary or duplicative items and procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or services to be procured. Additionally, the City did not maintain written standards of conduct covering conflicts of interest and governing actions of its employees engaged in the selection, award, and administration of contracts. Suspension and Debarment Prior to entering into subawards and covered transactions, recipients are required to verify that such contracts and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (ELPS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The City failed to verify that vendors were not suspended or debarred prior to entering into covered transactions exceeding $25,000. Of the eight vendors tested, no documentation was provided to show that a check was performed against the EPLS or through other acceptable verification methods. The lack of internal controls and noncompliance was determined to be a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320(b) states in part: "Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance awards exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. A procurement method in which bids are publicly solicited and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. . . . (2) Proposals. A procurement method in which either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City's management was not aware of federal compliance requirements related to procurement and suspension and debarment. The City had not established or implemented the necessary internal controls and written policies to ensure purchases and contracts were administered in accordance with federal and state regulations. Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure that the services obtained provided full and open competition or the basis of the price. In addition, the City cannot ensure the vendors paid were eligible to participate in federal programs. Any program funds the City used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Noncompliance with the provisions of federal statues, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls to ensure expenditures made from federal awards use the appropriate procurement method and retain the documentation to support the procurement methods used in order to ensure compliance with the terms and conditions of the federal award. We recommended that management of the City establish a proper system of internal controls and develop policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into contracts or subawards. We also recommended strengthening its policies and procedures to ensure appropriate supporting documentation for federal programs is retained to be presented for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria: 2 CFR 200.319 states that all procurement transactions under the Federal award must be conducted in a manner that provides full and open competition and is consistent with Federal procurement standards. 2 CFR 200.214 states in part that recipients and subrecipients are subject to the suspension and debarment regulations. In addition, 2 CFR 200.303 in part states that a recipient of a Federal award must establish, document, and maintain effective internal control over the Federal award. Condition: We have selected and tested one vendor for suspension and debarment with expenditures in excess of $25,000 for the construction of a new shelter and office space for compliance with suspension and debarment. We identified the one vendor were not properly verified for suspension and debarment prior to the contract execution date. It appears that the vendor was not suspended or debarred by the federal government. Cause: Internal controls over suspension and debarment were not properly designed to verify that all vendors are in compliance with suspension and debarment. Effect: Our testing identified that the Organization’s internal controls over compliance with suspension and debarment are not in place to comply with the suspension and debarment requirements. Based on our testing, the vendor was in compliance with suspension and debarment. Repeat Finding: No. Recommendation: We recommend that the Organization re-evaluate the design of internal controls over compliance with suspension and debarment compliance requirements based on 2 CFR 200.214 and establish policies and procedures to comply with these requirements as they relate to requirements related to federal grants. Corrective Action Plan: Reported on page 20.
Internal Controls over Compliance and Compliance with Procurement Standards Information on the Federal Program: Federal Agency: U.S. Department of Treasury Assistance Listing Number: 21.029 Assistance Listing Name: COVID-19 - Coronavirus Capital Projects Fund Pass-through Award: Pass-through Entity Award Number Award Period District of Columbia CPFFN0167 November 21, 2023 through December 31, 2026 Criteria: 2 CFR Section §200.318(i) states, “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.” Per 2 CFR Section §200.319, “All procurement transactions for the acquisition of property or services 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.” 2 CFR Section §200.324 stipulates that a non-Federal entity must perform a cost or price analysis for each procurement in excess of a minimum threshold. Additionally, 2 CFR Section §200.320(c) states in part, “There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of [the defined] circumstances apply”. Condition: We noted there was insufficient documentation retained to support adherence to the required procurement policy and standards. Documentation was unable to be provided to support that cost or price analyses were performed and were conducted providing full and open competition. Additionally, for one procurement deemed noncompetitive by WWHS, none of the circumstances allowing noncompetitive procurement were met. Cause: WWHS’ internal controls over procurement did not fully operate as designed for the year ended December 31, 2024. WWHS did not maintain all required aspects of formal documentation as required by the applicable 2 CFR standards, was unable to provide evidence of full and open competition, and in one instance improperly elected noncompetitive procurement. Effect: We were unable to determine whether the value of procurements for goods or services that exceeded the micro-purchase threshold followed a proper formal procurement method in accordance with 2 CFR Sections §200.319, 320, and 324. Failure to perform procurement procedures in accordance with WWHS’ documented policies and General Procurement Standards as outlined in the 2 CFR Part 200 could result in the procurement being disallowed. Questioned costs: Not determinable Context: We selected a sample of 6 procurements by non-statistical methods, out of a population of 11 procurements. All procurements are related to eligible pre-award costs. WWHS was unable to provide sufficient formal procurement documentation to support full and open competition and performance of cost or price analysis for 4 out of 6 selected procurements. One of those samples was deemed noncompetitive by WWHS but did not meet the circumstances allowing noncompetitive procurement. The prevalence of these findings is detailed in the condition section above. Repeat finding: This is not a repeat finding. Recommendation: We recommend management refine their procurement tracking method by clarifying established policies and procedures to create more consistency throughout all WWHS purchase transactions. We also recommend management ensure all required procurement documentation is maintained in conjunction with its document retention policy and that a standardized checklist is used for all purchase transactions. Finally, we recommend management train personnel involved in procurement transactions, including reviewer and approver, to adhere to the documented procurement procedures. View of Responsible Officials: The procurement referenced in this finding was completed in 2021 and was connected to the buildout of a new facility that was opened in 2023. The federal award used to ultimately fund the project was obtained in 2024, and thus the expenditures retroactively applied to the award. Management concurs with this finding and will ensure proper adherence to the procurement policy.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
2024-001 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Program Information Funding Agency: U.S. Department of the Treasury Federal ALN: 21.027 Criteria Per 2 CFR 200.214, non-federal entities are prohibited from contracting with parties that are suspended or debarred. 2 CFR 200.318(i) also states that "subrecipients must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price." Condition The Chamber has a procurement policy in place; however, the Chamber neglected to verify if vendors had been suspended or debarred, in accordance with stated regulations. The Chamber also did not maintain sufficient records to document the rationale for the procurement method used for a transaction exceeding the small purchase threshold. Questioned Costs $25,000 Context A sample of 3 vendors was made from a population of 3 vendors whose expenses exceeded the covered transaction threshold that were charged to the major program. Of the 3 sampled vendors, the Chamber neglected to check the suspension or debarment status of 1 vendor prior to entering a covered transaction of $25,000. A sample of 3 vendors was made from a population of 3 vendors whose total transactions exceeded the small purchase threshold. Of the 3 sampled vendors, the Chamber did not maintain sufficient records to document the rationale of using a noncompetitive procurement method for a small purchase transaction. Cause The Chamber claimed that they had been conducting business transactions with this vendor prior to having a procurement policy in place and did not implement the procurement policy on already developed business relationships. The Chamber also did not consider documenting its rationale for continuing to use the vendor for services that exceeded the small purchase threshold that were charged to the major program. Effect Purchases may have occurred that do not follow the policy, and contracts with vendors that had been suspended or debarred could have been awarded and not detected. The Chamber also did not conduct procurement transaction "in a manner that provides full and open competition," as defined in 2 CFR 200.319(a). Repeat Finding Yes - reference 2023-001. Auditor's Recommendations Tacoma-Pierce County Chamber of Commerce should include a provision in all contracts transacted in conjunction with using funds originating from a federal award grant, with respect to suspension and debarment, communicate all requirements for procurement to staff and establish procedures to verify that vendors are not suspended or debarred. Chamber staff should also perform an independent status check of vendors in sam.gov prior to entering into an agreement and retain the search results. The Chamber should also evaluate its current method of procurement and educate staff that if using funds from a federal award to enter into a transaction exceeding the small purchase threshold, that full and open competition must be facilitated, despite any prior relationships with vendors.
Finding Number: 2024-010 Prior Year Finding Number: N/A Compliance Requirement: Procurement and Suspension and Debarment Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: District of Columbia Public Library (DCPL) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, 2 CFR Section 200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to 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. All procurement transactions must be conducted in a manner providing full and open competition consistent in accordance with 2 CFR Section 200.319 and must be performed using the appropriate procurement method as outlined in 2 CFR Section 200.320. In accordance with 2 CFR Section 200.320(c), Noncompetitive procurement. There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. Condition – During our testing of procurement and suspension and debarment requirements, we examined the two (2) procurement contracts that comprised the entire procurement population. Based on the procedures performed, we identified one (1) contract, valued at $278,259, out of the two (2) contracts totaling $8,185,708, in which DCPL used a single source or sole source justification for the selection rationale. However, this justification did not comply with the requirements set forth in 2 CFR Section 200.320(c). Questioned Costs – Not determinable. Context – This is a condition identified per review of DCPL’s compliance with the specified requirements using a statistically valid sample. Effect – Failure to adhere to the procurement procedures specified in the Uniform Administrative Requirements may lead to the Federal agency disallowing the procurement and associated costs. Cause – While DCPL adhered to their policies and procedures for private expenditures, the agency did not adhere to federal procurement requirements (2 CFR Section 200.320(c)) listed above to support noncompetitive procurement on the requirements to use sole source. Recommendation – We recommend that management establish the requisite internal control policies and procedures to ensure that all procurements reported under the federal program are in compliance. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DCPL concurs with the auditor’s findings and recommendations. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
Failure to Follow Procurement Policy Finding 2024-002 Condition: The Authority did not comply with the current procurement policy as procedures were not fully followed and forms required by the Authority’s procurement policy were not completed for the heating ventilation and cooling project, new roof, and electric vehicle charging stations. The following forms required by either 2 CFR 200 and/or the Authority’s own procurement policy were not completed for the current year capital asset purchases: Written Record of Procurement Checklist Form, Method of Procurement Decision Matrix, Advertisement and Solicitation Form, Bid Quotations, Fewer Than 3 Offers Received Evaluation if applicable, Proposal Tabulation, Certification of Compliance with Federal Clauses for the assets less than $25,000, and Responsibility Determination (sam.gov debarred verification). Criteria: The following requirements are documented in 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 2 CFR 200.214 Suspension and Debarment Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR Part 200.318 General Procurement Standards (a) The Non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. (i) the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 2 CFR 200.320 Methods of Procurement to be Followed (b) The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.324 Contract Cost and Price (a) The Non-Federal entity must perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold including contract modifications. The method and degree of analysis is dependent on the facts surrounding the particular procurement situation, but as a starting point, the non-Federal entity must make independent estimates before receiving bids or proposals. Concurrently, the Authority’s did not comply with its own current procurement policy as it did not follow or prepare the required documentation detailed in the following sections. Procurement Requests-The Authority will maintain sufficient records to detail the history of a procurement. Such records shall include method of procurement, selection of contract type, contractor selection (or rejection), and the contract price. The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as nonresponsible and ineligible for contract award. Debarment and Suspension- The Authority will treat any prospective contractor or sub-contractor listed on a centralized State government debarment and suspension list as non-responsible and ineligible for contract awards. To see if a prospective contractor is eligible, we will look on the website www.SAM.gov and when the bid has been received. Methods of Procurement- a. Micro and Emergency Purchases (do not exceed $10,000)-(a) A written determination as to why price is deemed fair and reasonable must be on file with each purchase made under this method of procurement using Micro-Purchase Price Reasonableness Determination Form. (b) Splitting of procurements to avoid the competitive procurement requirements of federal and state statues shall not be condoned. b. Small Purchase Procurement ($10,000 to $250,000)-(a) A minimum of two price or rate quotations shall be obtained from qualified sources; (b) The procurement will be made from the lowest priced qualified bid, if products or goods are equal; (c) MDOT requires for procurements under $25,000.00. Included Procurement Appendix A, B, E, F, G, H, or I and Vehicle Specification certification if applies. (d) MDOT requires for procurements over $25,000.00 solicitations, including specifications and written selection procedures (lowest bids), Include Procurement Appendix A, F, G, H or I and Vehicle Specification certification if applies. Third Party Contracts with applicable clauses and bond documents must be included. Cause: The Authority did not follow its own procurement policy. Effect: The Authority is noncompliant with 2 CFR 200 and its own procurement policy. Directive: We direct the Authority review and update its procurement policy and implement procedures to ensure that the Authority is complying with the federal requirements, required forms are being completed, and documentation is being maintained. Management’s Response--Corrective Action Plan: Contact person is Todd Shurn, Executive Director, 275 East Wall Street, P.O. Box 837, Benton Harbor, Michigan 49023. Telephone (269) 927-2268. The Authority acknowledges the finding and is currently working to correct this.
2024-001 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Program Information Funding Agency: U.S. Department of the Treasury Federal ALN: 21.027 Criteria Per 2 CFR 200.214, non-federal entities are prohibited from contracting with parties that are suspended or debarred. 2 CFR 200.318(i) also states that "subrecipients must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price." Condition The Chamber has a procurement policy in place; however, the Chamber neglected to verify if vendors had been suspended or debarred, in accordance with stated regulations. The Chamber also did not maintain sufficient records to document the rationale for the procurement method used for a transaction exceeding the small purchase threshold. Questioned Costs $25,000 Context A sample of 3 vendors was made from a population of 3 vendors whose expenses exceeded the covered transaction threshold that were charged to the major program. Of the 3 sampled vendors, the Chamber neglected to check the suspension or debarment status of 1 vendor prior to entering a covered transaction of $25,000. A sample of 3 vendors was made from a population of 3 vendors whose total transactions exceeded the small purchase threshold. Of the 3 sampled vendors, the Chamber did not maintain sufficient records to document the rationale of using a noncompetitive procurement method for a small purchase transaction. Cause The Chamber claimed that they had been conducting business transactions with this vendor prior to having a procurement policy in place and did not implement the procurement policy on already developed business relationships. The Chamber also did not consider documenting its rationale for continuing to use the vendor for services that exceeded the small purchase threshold that were charged to the major program. Effect Purchases may have occurred that do not follow the policy, and contracts with vendors that had been suspended or debarred could have been awarded and not detected. The Chamber also did not conduct procurement transaction "in a manner that provides full and open competition," as defined in 2 CFR 200.319(a). Repeat Finding Yes - reference 2023-001. Auditor's Recommendations Tacoma-Pierce County Chamber of Commerce should include a provision in all contracts transacted in conjunction with using funds originating from a federal award grant, with respect to suspension and debarment, communicate all requirements for procurement to staff and establish procedures to verify that vendors are not suspended or debarred. Chamber staff should also perform an independent status check of vendors in sam.gov prior to entering into an agreement and retain the search results. The Chamber should also evaluate its current method of procurement and educate staff that if using funds from a federal award to enter into a transaction exceeding the small purchase threshold, that full and open competition must be facilitated, despite any prior relationships with vendors.
Finding Number: 2024-010 Prior Year Finding Number: N/A Compliance Requirement: Procurement and Suspension and Debarment Program: U.S. Department of the Treasury COVID-19 – Coronavirus Capital Projects Fund ALN: 21.029 Award #: CPFFN0167 Award Year: 02/09/2022 – 12/31/2026 Government Department/Agency: District of Columbia Public Library (DCPL) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, 2 CFR Section 200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to 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. All procurement transactions must be conducted in a manner providing full and open competition consistent in accordance with 2 CFR Section 200.319 and must be performed using the appropriate procurement method as outlined in 2 CFR Section 200.320. In accordance with 2 CFR Section 200.320(c), Noncompetitive procurement. There are specific circumstances in which the recipient or subrecipient may use a noncompetitive procurement method. The noncompetitive procurement method may only be used if one of the following circumstances applies: (1) The aggregate amount of the procurement transaction does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); (2) The procurement transaction can only be fulfilled by a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from providing public notice of a competitive solicitation; (4) The recipient or subrecipient requests in writing to use a noncompetitive procurement method, and the Federal agency or pass-through entity provides written approval; or (5) After soliciting several sources, competition is determined inadequate. Condition – During our testing of procurement and suspension and debarment requirements, we examined the two (2) procurement contracts that comprised the entire procurement population. Based on the procedures performed, we identified one (1) contract, valued at $278,259, out of the two (2) contracts totaling $8,185,708, in which DCPL used a single source or sole source justification for the selection rationale. However, this justification did not comply with the requirements set forth in 2 CFR Section 200.320(c). Questioned Costs – Not determinable. Context – This is a condition identified per review of DCPL’s compliance with the specified requirements using a statistically valid sample. Effect – Failure to adhere to the procurement procedures specified in the Uniform Administrative Requirements may lead to the Federal agency disallowing the procurement and associated costs. Cause – While DCPL adhered to their policies and procedures for private expenditures, the agency did not adhere to federal procurement requirements (2 CFR Section 200.320(c)) listed above to support noncompetitive procurement on the requirements to use sole source. Recommendation – We recommend that management establish the requisite internal control policies and procedures to ensure that all procurements reported under the federal program are in compliance. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DCPL concurs with the auditor’s findings and recommendations. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Repeat finding 2023-001, 2022-001, and 2021-002 FAN 93.676 Unaccompanied Alien Children Program Child Nutrition Cluster Procurement and Suspension & Debarment Type of Finding: Non-Compliance U.S. Department of Health & Human Services U.S Department of Agriculture Criteria Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. 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). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The requirements that apply to procurement under grants and cooperative agreements are contained in 2 CFR sections 200.317 through 200.326, program legislation, federal awarding agency regulations, and the terms and conditions of the award. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. The requirements for non-procurement suspension and debarment are contained in OMB guidance in 2 CFR Part 180, which implements Executive Orders 12549 and 12689, “Debarment and Suspension;” federal awarding agency regulations in Title 2 of the CFR adopting/implementing the OMB guidance in 2 CFR Part 180; program legislation; and the terms and conditions of the award. Condition The Organization had no findings for contracts procured during the last three fiscal years that were detail tested. However, the Organization’s management recognizes that there are still active contracts under the federal programs for fiscal year ending August 31, 2024 that were procured over three fiscal years ago in which adherence to procurement policies, specifically documentation history of procurement, has not been maintained. In regards to progress made in reducing the number of vendors that are out of compliance, specifically vendors with over $50,000 of annual expenditures that were categorized as “legacy” vendors procured under the previous procurement policies, the Organization went from having 100 vendors totaling approximately $159 million in expenditures as of August 31, 2023, to 46 vendors totaling approximately $119 million as of August 31, 2024. This shows a decrease of 54% in the number of legacy vendors with a decrease of 25% in the dollar-value of the legacy vendors year over year. Further, the Organization continues to make progress in reducing legacy vendor non-compliance by reducing that number to 33 vendors totaling approximately $113 million as of January 2, 2025. As this has been a recurring finding in which management is actively getting all active contracts under the current procurement policies, only those current contracts that were procured in the last three fiscal years were detail tested. Of the approximately 70 active vendor contracts that were procured in the last three fiscal years that were wholly or partially funded with Unaccompanied Alien Children Program revenue dollars or with Child Nutrition Cluster Program revenue dollars, ten were tested with no errors noted. Cause The Organization is aware they are operating under contracts that were procured in previous years that may not have all the records maintained. Contracts procured within the last three years show compliance with federal requirements based on detailed testing. Reprocuring all of the legacy contracts at once would potentially cause disruptions in operations due to the products/services related those vendors playing an important role in the Organization’s day-to-day operations. As such, the Organization still has active contracts procured under the old policies that they are working on reprocuring as these contracts’ renewal dates arise, if not earlier. Effect or Potential Effect The Organization could potentially be under contract with vendors that are not the best value, not adequately qualified, potentially suspended or debarred, or otherwise not suitable for contract under federal procurement guidelines. No questioned costs were identified, as services/goods under these contracts that were previously tested were deemed to be allowable under the program, and no exceptions noted for allowable costs/activities for samples that included payment to those vendors in previous years or current year. Recommendation The Organization should continue to review all its “legacy” contracts that were procured under the previous procurement policies to determine if there is proper documentation maintained for compliance with applicable procurement guidelines. This includes systematically re-procuring any current contracts not in compliance as soon as feasible. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.