FINDING 2022-001 Information on the federal program: Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Other Matters 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 awards 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(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." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) 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. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive 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. The sealed bids method is the preferred method for procuring construction, if the conditions. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirements. Cause: The School?s management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the 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. During fiscal year 2021, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold. The School Corporation did not obtain quotes, nor provide full and open competition. Additionally, there was no documentation available to support the rationale to limit competition. During fiscal year 2022, the School Corporation purchased food and supply items from one vendor with total purchases that exceeded the simplified acquisition threshold. The School Corporation did not solicit bids or award a contract. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. Suspension and Debarment Nonfederal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During fiscal years 2021 and 2022, the School Corporation entered into covered transactions with one vendor exceeding $25,000 but did not verify the vendor was not suspended or debarred or otherwise excluded from or ineligible for participation in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Other Matters 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 awards 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(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." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) 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. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive 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. The sealed bids method is the preferred method for procuring construction, if the conditions. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirements. Cause: The School?s management had not developed or implemented a system of internal control that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: An effective internal control system was not designed, nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement When the value of procurement of property or services exceeds the simplified acquisition threshold, customarily set at $250,000, a formal bid process must take place and a contract must be awarded. Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold of $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the 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. During fiscal year 2021, the School Corporation purchased food and supply items from one vendor with total purchases that fell within the small purchase threshold. The School Corporation did not obtain quotes, nor provide full and open competition. Additionally, there was no documentation available to support the rationale to limit competition. During fiscal year 2022, the School Corporation purchased food and supply items from one vendor with total purchases that exceeded the simplified acquisition threshold. The School Corporation did not solicit bids or award a contract. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. Suspension and Debarment Nonfederal entities and contractors are subject to non-procurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in Federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. During fiscal years 2021 and 2022, the School Corporation entered into covered transactions with one vendor exceeding $25,000 but did not verify the vendor was not suspended or debarred or otherwise excluded from or ineligible for participation in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-003 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded with?out 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. There were no documented internal controls over procurements made under the small and micro-purchase thresholds. For 3 of 6 purchases tested totaling $95,000, the School Corporation did not provide audit evidence that price quotations had been requested for purchases exceeding $10,000, but less than $150,000. Additionally, the School Corporation did not provide audit evidence that the one vendor paid $25,000 was verified to not be excluded or disqualified from participation in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) (Uniform Guidance) states: "The non-Federal entity must use its own docu-mented 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 this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acqui?sition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procure?ment 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 ? LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal con-trols to ensure compliance and comply with the grant agreement and the Procurements and Suspension and Debarment compliance requirement. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
Cluster: Research and Development Federal Agency: Department of Health and Human Services, Department of Defense Award Names: First-in-human clinical translation of a near-infrared, nerve-specific fluorophore to facilitate tissue-specific fluorescence-guided surgery; Self-Administered, Motor-Free, Cognitive Screening Battery for MS: Development and Initial Validation; Decision Making in Transmasculine Genital Reconstruction Surgery (TMGRS) Award Numbers: 1R01NS116994-01A1; W81XWH2010330; R21DK124733 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders; Military Medical Research and Development; Diabetes, Digestive, and Kidney Diseases Extramural Research Assistance Listing Number: 93.853; 12.420; 93.847 Award Year: 2021 - 2022 Pass-through entity: Not applicable Criteria The Health System has a policy whereby purchases shall comply with Uniform Guidance for Grants and Cooperative agreements, as established in 2 CFR 200.320 Methods of Procurement to be followed and they have adopted $10,000 as their micro-purchase threshold. 2 CFR 200.318 requires that documentation of the history of the procurement, the procurement method and rationale for the method selected, selection of contract type, basis for contractor selection, and basis for the contract price to be included in the procurement file. Additionally, a non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). The Health System?s suspension and debarment policy requires suspension and debarment verifications to be completed for all vendors utilized on federal awards, regardless of expenditure amount. Condition As part of the Research and Development cluster procurement testing of new purchases greater than $10,000 there were 4 transactions selected for testing out of a population of 21 transactions totaling $481,000. We noted two transactions of $69,500 and $12,000 where there was no documentation of the vendor justification, but were determined to be sole source. Management was able to provide us with an understanding of why the vendor was selected; however, this sole source justification was not documented in the procurement files. Additionally, as part of the testing over compliance with the Health System?s suspension and debarment verification policy, we noted one vendor with expenditures of $1,400 where the suspension and debarment verification was not performed in advance of paying the related invoice. We received evidence of the suspension and debarment verification completed after invoice payment, where no exclusions were identified. Cause While the procurement policy outlines the procedures to be followed for federal purchases, there is no formal review to ensure all federal documentation requirements related to purchases above the micropurchase threshold have been included in the procurement files. Additionally, there is no formal review to ensure that suspension and debarment verifications have been completed for all vendors prior to invoice payment. Effect The lack of adherence to established policies for bidding documentation and sole source justification and a formal process for review could result in competition being inappropriately limited. The lack adherence to the suspension and debarment verification policy could result in the Health System conducting business with a vendor that is suspended or debarred. Questioned Costs None noted. Recommendation We recommend the Health System formalize the documentation and review required for procurements over the micro-purchase threshold, including review of multiple vendor quotations or sole source justification documentation prior to the purchase being made. Additionally, the Health System should ensure that timely suspension and debarment verifications are completed in line with policy. Management?s View and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings
FINDING 2022-003 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded with?out 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. There were no documented internal controls over procurements made under the small and micro-purchase thresholds. For 3 of 6 purchases tested totaling $95,000, the School Corporation did not provide audit evidence that price quotations had been requested for purchases exceeding $10,000, but less than $150,000. Additionally, the School Corporation did not provide audit evidence that the one vendor paid $25,000 was verified to not be excluded or disqualified from participation in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) (Uniform Guidance) states: "The non-Federal entity must use its own docu-mented 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 this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acqui?sition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procure?ment 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 ? LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal con-trols to ensure compliance and comply with the grant agreement and the Procurements and Suspension and Debarment compliance requirement. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded with?out 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. There were no documented internal controls over procurements made under the small and micro-purchase thresholds. For 3 of 6 purchases tested totaling $95,000, the School Corporation did not provide audit evidence that price quotations had been requested for purchases exceeding $10,000, but less than $150,000. Additionally, the School Corporation did not provide audit evidence that the one vendor paid $25,000 was verified to not be excluded or disqualified from participation in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) (Uniform Guidance) states: "The non-Federal entity must use its own docu-mented 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 this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acqui?sition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procure?ment 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 ? LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal con-trols to ensure compliance and comply with the grant agreement and the Procurements and Suspension and Debarment compliance requirement. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded with?out 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. There were no documented internal controls over procurements made under the small and micro-purchase thresholds. For 3 of 6 purchases tested totaling $95,000, the School Corporation did not provide audit evidence that price quotations had been requested for purchases exceeding $10,000, but less than $150,000. Additionally, the School Corporation did not provide audit evidence that the one vendor paid $25,000 was verified to not be excluded or disqualified from participation in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) (Uniform Guidance) states: "The non-Federal entity must use its own docu-mented 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 this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acqui?sition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procure?ment 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 ? LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal con-trols to ensure compliance and comply with the grant agreement and the Procurements and Suspension and Debarment compliance requirement. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded with?out 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. There were no documented internal controls over procurements made under the small and micro-purchase thresholds. For 3 of 6 purchases tested totaling $95,000, the School Corporation did not provide audit evidence that price quotations had been requested for purchases exceeding $10,000, but less than $150,000. Additionally, the School Corporation did not provide audit evidence that the one vendor paid $25,000 was verified to not be excluded or disqualified from participation in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) (Uniform Guidance) states: "The non-Federal entity must use its own docu-mented 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 this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acqui?sition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procure?ment 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 ? LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal con-trols to ensure compliance and comply with the grant agreement and the Procurements and Suspension and Debarment compliance requirement. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded with?out 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. There were no documented internal controls over procurements made under the small and micro-purchase thresholds. For 3 of 6 purchases tested totaling $95,000, the School Corporation did not provide audit evidence that price quotations had been requested for purchases exceeding $10,000, but less than $150,000. Additionally, the School Corporation did not provide audit evidence that the one vendor paid $25,000 was verified to not be excluded or disqualified from participation in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) (Uniform Guidance) states: "The non-Federal entity must use its own docu-mented 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 this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acqui?sition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procure?ment 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 ? LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal con-trols to ensure compliance and comply with the grant agreement and the Procurements and Suspension and Debarment compliance requirement. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded with?out 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. There were no documented internal controls over procurements made under the small and micro-purchase thresholds. For 3 of 6 purchases tested totaling $95,000, the School Corporation did not provide audit evidence that price quotations had been requested for purchases exceeding $10,000, but less than $150,000. Additionally, the School Corporation did not provide audit evidence that the one vendor paid $25,000 was verified to not be excluded or disqualified from participation in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) (Uniform Guidance) states: "The non-Federal entity must use its own docu-mented 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 this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acqui?sition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procure?ment 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 ? LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal con-trols to ensure compliance and comply with the grant agreement and the Procurements and Suspension and Debarment compliance requirement. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 20-21, FY 21-22 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded with?out 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. There were no documented internal controls over procurements made under the small and micro-purchase thresholds. For 3 of 6 purchases tested totaling $95,000, the School Corporation did not provide audit evidence that price quotations had been requested for purchases exceeding $10,000, but less than $150,000. Additionally, the School Corporation did not provide audit evidence that the one vendor paid $25,000 was verified to not be excluded or disqualified from participation in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) (Uniform Guidance) states: "The non-Federal entity must use its own docu-mented 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 this part." 2 CFR 200.318(a) (Revised Uniform Guidance) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acqui?sition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must confirm to the procurement standards identified in ?? 200.317 through 200.327." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procure?ment 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 ? LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not developed a system of internal controls that would have ensured compliance with the compliance requirement listed above. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal con-trols to ensure compliance and comply with the grant agreement and the Procurements and Suspension and Debarment compliance requirement. LIBERTY-PERRY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2 CFR 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 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 200.327. 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 nonfederal entity must: 1. Meet the general procurement standards in 2 CFR 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 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR 200.320(a)(1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR 200.320(a)(1)(ii)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR 200.320(a)(2)(i)). 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 200.320(b)(1); the competitive proposals method under the conditions specified in 2 CFR 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 five circumstances are met, in accordance with 2 CFR 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 200.324(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR 200.324(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR 200.327. These provisions are described in Appendix II to 2 CFR Part 200, ?Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Black River Local School District Board Policy DJF-R ? Purchasing Procedures indicates the following methods of procurement will be used for all purchases of goods and services made with federal funds: 1. Micro-purchases are purchases up to $10,000 and may be made in accordance with District purchasing procedures when the costs are reasonable. To the extent practicable, these purchases are distributed equitably among qualified suppliers. 2. Small purchase are purchases between $10,000 and $250,000. Prior to authorizing the purchase, the District will try to obtain price rates or quotations from a minimum of three vendors or providers. The District will obtain these price rates or quotations by written quotes. 3. Sealed bid procedures are used for firm fixed price contracts over $250,000 and is used as the preferred method for construction projects. Bids are solicited from an adequate number of known suppliers, which cannot be less than two responsible bidders. The District will solicit bids by posting bids using at least one public posting source. The contract will be awarded to the lowest responsive and responsible bidder. 4. Competitive proposals are used for all purchases over $250,000 for which sealed bids are not appropriate and must be used for architectural or engineering services. Contracts entered into for competitive proposals may be fixed-price or cost reimbursement. The District will publicize a request for proposal by advertising through the local paper or using a procurement source. The District will evaluate proposals in order to award the contract to the most advantageous proposal when considering cost and other factors. The District will evaluate proposals by checklist and compare. 5. Sole source procurement is used only when the goods or services are only available from a single source; a public exigency or emergency exists; there is inadequate competition and the applicable pass through entity approves this method. Lack of proper internal controls over Federal Grants management led to the District expending the following amounts without using the proper procurement method: Education Stabilization Fund - Elementary and Secondary School Emergency Relief (ESSER II) Fund, AL #84.425D ? $33,000 was paid to a vendor for electrical work related to a HVAC project; however, the District could not provide documentation to support the required price quotations were obtained from a minimum of three vendors. ? $350,000 was paid to a vendor for a HVAC project; however, the District could not provide documentation to support sealed bids were solicited and received, and the contract awarded to the lowest responsive and responsible bidder. ? $226,752 was paid to a vendor for a HVAC project; however, the District could not provide documentation to support the required price quotations were obtained from a minimum of three vendors. Education Stabilization Fund - American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund, AL #84.425U ? $1,898,392 was paid to a vendor for the design and build of kindergarten and high school classrooms; however, the District could not provide documentation to support sealed bids were solicited and received and the contract awarded to the lowest responsive and responsible bidder. Without proper controls over procurement, there is an increased risk that the District is not in compliance with applicable federal regulations. Noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The District should review the procurement requirements specified above and ensure the proper procurement method is used. The District should also maintain adequate documentation to detail the history of procurement.
2 CFR 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 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 200.327. 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 nonfederal entity must: 1. Meet the general procurement standards in 2 CFR 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 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR 200.320(a)(1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR 200.320(a)(1)(ii)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR 200.320(a)(2)(i)). 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 200.320(b)(1); the competitive proposals method under the conditions specified in 2 CFR 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 five circumstances are met, in accordance with 2 CFR 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 200.324(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR 200.324(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR 200.327. These provisions are described in Appendix II to 2 CFR Part 200, ?Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Black River Local School District Board Policy DJF-R ? Purchasing Procedures indicates the following methods of procurement will be used for all purchases of goods and services made with federal funds: 1. Micro-purchases are purchases up to $10,000 and may be made in accordance with District purchasing procedures when the costs are reasonable. To the extent practicable, these purchases are distributed equitably among qualified suppliers. 2. Small purchase are purchases between $10,000 and $250,000. Prior to authorizing the purchase, the District will try to obtain price rates or quotations from a minimum of three vendors or providers. The District will obtain these price rates or quotations by written quotes. 3. Sealed bid procedures are used for firm fixed price contracts over $250,000 and is used as the preferred method for construction projects. Bids are solicited from an adequate number of known suppliers, which cannot be less than two responsible bidders. The District will solicit bids by posting bids using at least one public posting source. The contract will be awarded to the lowest responsive and responsible bidder. 4. Competitive proposals are used for all purchases over $250,000 for which sealed bids are not appropriate and must be used for architectural or engineering services. Contracts entered into for competitive proposals may be fixed-price or cost reimbursement. The District will publicize a request for proposal by advertising through the local paper or using a procurement source. The District will evaluate proposals in order to award the contract to the most advantageous proposal when considering cost and other factors. The District will evaluate proposals by checklist and compare. 5. Sole source procurement is used only when the goods or services are only available from a single source; a public exigency or emergency exists; there is inadequate competition and the applicable pass through entity approves this method. Lack of proper internal controls over Federal Grants management led to the District expending the following amounts without using the proper procurement method: Education Stabilization Fund - Elementary and Secondary School Emergency Relief (ESSER II) Fund, AL #84.425D ? $33,000 was paid to a vendor for electrical work related to a HVAC project; however, the District could not provide documentation to support the required price quotations were obtained from a minimum of three vendors. ? $350,000 was paid to a vendor for a HVAC project; however, the District could not provide documentation to support sealed bids were solicited and received, and the contract awarded to the lowest responsive and responsible bidder. ? $226,752 was paid to a vendor for a HVAC project; however, the District could not provide documentation to support the required price quotations were obtained from a minimum of three vendors. Education Stabilization Fund - American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER) Fund, AL #84.425U ? $1,898,392 was paid to a vendor for the design and build of kindergarten and high school classrooms; however, the District could not provide documentation to support sealed bids were solicited and received and the contract awarded to the lowest responsive and responsible bidder. Without proper controls over procurement, there is an increased risk that the District is not in compliance with applicable federal regulations. Noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. The District should review the procurement requirements specified above and ensure the proper procurement method is used. The District should also maintain adequate documentation to detail the history of procurement.
Finding No. 2022-002 Education Stabilization Fund: U.S. Department of Education: COVID-19 ? Higher Education Emergency Relief Fund ? Institutional Aid Portion, Assistance Listing 84.425F (award number P425F204328) Statistically valid sample: No and it was not intended to be. Repeat finding: Not a repeat finding. Compliance Requirement ? Procurement ? Significant Deficiency and Noncompliance 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: ? 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)). For those procurements supported by HEERF grant funds, auditors should determine if institutions sufficiently documented rationales and determinations in making any sole source awards during the time of national emergency due to the coronavirus. Exceptions from the competitive procurement requirements of the Uniform Guidance may be accepted if institutions have documented that the public exigency or emergency would not permit a delay, in accordance with 2 CFR section 200.320(f)(2). A circumstance that may influence this determination is the length of time between the procurements and the emergency at issue. Specifically, exceptions are more likely to be acceptable the closer the procurement occurred to the March 13, 2020 declaration of the national emergency. Further, the non-Federal entity must establish and maintain an 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 terms and conditions of the Federal award (2 CFR 200.303). Condition and Context The University?s procurement policy for procurements over $10,000 is to either competitively bid it or document the sole source justification for why competitive bidding was not able to be completed. Based on our test work, for two of our seven selections, the University did not properly document its compliance with the procurement policy. For one selection, we noted that the University did not properly retain documentation for the competitive bidding, while for the other selection, the University did not properly document within the vendor?s procurement file that it was sole sourced due to the pandemic and needing the services in an expedited fashion as allowed per the HEERF requirements. Cause The documentation of procurement decisions was not properly retained to support the decisions made during the time period. Effect The University was not in compliance with their procurement policy. Questioned Costs There were no questioned costs identified as the University contracted with the respective parties in both cases and the costs were allowable under the HEERF requirements. Recommendation The University should strengthen its policies and practices to ensure that documentation is retained for all procurement decisions in order to support compliance with their procurement policy. Views of Responsible Official Management agrees with the recommendation. The University will ensure that all procurement decisions comply with the Stevens Procurement Policy and are properly documented, including the procurement method used (e.g., competitive bidding or sole source justification). The Director of Procurement will ensure that all Stevens employees responsible for making purchasing decisions at the University are familiar with the Procurement Policy and the need to ensure full compliance even when making purchasing decisions during emergency situations (e.g., COVID pandemic). The Director of Procurement will ensure compliance with the Stevens Procurement Policy.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2020-2021, FY 2021-2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed nor implemented at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. 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. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not enter into a contract, as required, with the sole vendor that was less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. The School Corporation purchased goods and services in the amount of $74,906 and $82,070 during fiscal years 2020-2021 and 2021-2022, respectively, with the vendor. Additionally, the School Corporation did not verify the vendor was neither suspended nor debarred, or otherwise excluded or disqualified from participating in federal assistance programs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 16 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(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." 2 CFR 200.320(b) (Uniform Guidance) states: "Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources." 2 CFR 200.320 (Revised Uniform Guidance) states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and ?? 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in ? 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases ? (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 17 FAIRFIELD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states in part: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management had not established a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) Federal Agency: U.S. Department of Treasury, U.S. Department of Transportation Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027, Multiple Federal Award Identification Number and Year: Pub. L. No. 117-2-2021, Various Award Period: 5/10/2021 - 12/31/2026 Various Type of Finding: ? Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to ? 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, it was noted that the City did not follow federal procurement regulation nor its federal procurement policy. Questioned costs: $160,181 Context: During our testing, we noted the following exceptions, which are detailed by ALN Number. ALN 21.027 ? For 1 of 4 procurement transactions totaling approximately $160.2K, the City utilized a RFB with a closing date of 09/05/2016. ALN Multiple ? For 3 of 7 procurement transactions, the executed contract/agreement was not provided to us. ? For 2 of 7 procurement transactions, the RFP and evaluation sheets were not provided to us. ? For 1 of 7 procurement transactions, only the Cost Price Analysis, ICE, and Purchase Order Release were provided to us. No other supporting documentation. ? For 1 of 7 procurement transactions, the SPA provided to us was not current. Management?s Progress for Repeat Findings: The City plans to review the controls in place to ensure that our federal procurement guidelines are clear on City process and the need for retention of proper supporting documentation. In addition, we will also plan to have the SEFA completed well before the deadline to allow sufficient management review and major programs can be identified earlier in the audit process. The additional time will allow City departments to provide requested audit documentation within the Auditor?s deadlines. 2022 ? 006 (Previously 2021-012) Procurement (Significant Deficiency and Noncompliance) (Continued) Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Repeat Finding: 2021-012 Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City respectfully disagrees with the finding. The two exceptions noted above are, on the contrary, examples of good fiscal management by the City. The statewide price agreement and the cooperative education services contract were both competitive. The uniform grant guidance in to ? 200.318(e) below encourages state and local intergovernmental agreements. To foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. In addition, the City did compete the temporary employment services. The request for bids awarded contracts in October 2016. Three (3) years, three (3) months into the five (5) year term of the contract, the first COVID case was reported in the United States and the President declared a public health emergency on January 31. New Mexico and the City of Albuquerque soon followed with their declarations. The City made the decision to extend the existing contract with the existing rates. There is nothing in City policy that prevents extension of contracts for a specific length of time. Extending the contract most likely was a cost savings to the City because the rates would most likely would have increased. Auditor?s Response: We were not provided supporting documentation, as identified in management?s response, during our testwork over procurement to apply the necessary procedures to resolve this exception. Timeline and Responsible Position: June 2023 ? Chief Procurement Officer
Criteria or Specific Requirement: Grant recipients must comply with Uniform Guidance for procurement, specifically with 2 CFR sections 200.318 thru 200.327 including ensuring the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 DFR section 200.320. Condition: The City did not comply with 2 CFR 200.320 or with City procurement policies. The City did not obtain quotes for a project for upgrades to the financial system for the purpose of grants accounting and management. Cause: The City began the system upgrade project in a prior year using 21.019 CARES CRF funding. Under that grant program, procurement standards were not applicable under Uniform Guidance. Those funds were set to expire December 2021. Therefore, management concluded that since those expenditures were also allowable under 21.027, they would complete the project using funds from the Coronavirus State and Local Fiscal Recover Funds grant (Assistance Listing (AL)21.027). However, under the AL 21.027 grant, the City is required to follow the Uniform Guidance for procurement of contracts. Effect: The City is out of compliance with procurement requirements. Questioned Costs: None. Context: A small purchase could have been applied as the total amount spent under the contract was more than the micro-purchase amount but less than the simplified acquisition threshold. Under small purchase procedures price or rate quotes must be obtained. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that management establish and maintain effective internal control ensuring an understanding of compliance requirements prior to entering into contracts with vendors with intention of using of grant monies. Management Response: See Corrective Action Plan.
FINDING 2022-001 Information on the federal program: Subject: Special Education Cluster (IDEA) - Procurement Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency, Other Matters Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 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 this part. . . .(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 use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The lack of internal controls was isolated to the Special Education Cluster. Cause: The School Corporation had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were likely questioned costs of $147,319. These costs represent total expenses relating to the two consultants charged to the Special Education Cluster. Context: During testing of procurement over the Special Education Cluster, it was noted that the School Corporation did not obtain an appropriate number of bids relating to Special Education consultants as required under small purchase procurement guidelines. There were two consultants charged to the Special Education Cluster during the audit period with expenses totaling $147,319. One of these consultants was selected during testing for procurement. The issue impacted both ALN 84.027 and 84.173. No issues were identified when testing suspension and debarment requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Special Education Cluster (IDEA) - Procurement Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency, Other Matters Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 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 this part. . . .(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 use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The lack of internal controls was isolated to the Special Education Cluster. Cause: The School Corporation had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were likely questioned costs of $147,319. These costs represent total expenses relating to the two consultants charged to the Special Education Cluster. Context: During testing of procurement over the Special Education Cluster, it was noted that the School Corporation did not obtain an appropriate number of bids relating to Special Education consultants as required under small purchase procurement guidelines. There were two consultants charged to the Special Education Cluster during the audit period with expenses totaling $147,319. One of these consultants was selected during testing for procurement. The issue impacted both ALN 84.027 and 84.173. No issues were identified when testing suspension and debarment requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Special Education Cluster (IDEA) - Procurement Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency, Other Matters Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 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 this part. . . .(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 use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The lack of internal controls was isolated to the Special Education Cluster. Cause: The School Corporation had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were likely questioned costs of $147,319. These costs represent total expenses relating to the two consultants charged to the Special Education Cluster. Context: During testing of procurement over the Special Education Cluster, it was noted that the School Corporation did not obtain an appropriate number of bids relating to Special Education consultants as required under small purchase procurement guidelines. There were two consultants charged to the Special Education Cluster during the audit period with expenses totaling $147,319. One of these consultants was selected during testing for procurement. The issue impacted both ALN 84.027 and 84.173. No issues were identified when testing suspension and debarment requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Special Education Cluster (IDEA) - Procurement Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency, Other Matters Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 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 this part. . . .(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 use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The lack of internal controls was isolated to the Special Education Cluster. Cause: The School Corporation had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were likely questioned costs of $147,319. These costs represent total expenses relating to the two consultants charged to the Special Education Cluster. Context: During testing of procurement over the Special Education Cluster, it was noted that the School Corporation did not obtain an appropriate number of bids relating to Special Education consultants as required under small purchase procurement guidelines. There were two consultants charged to the Special Education Cluster during the audit period with expenses totaling $147,319. One of these consultants was selected during testing for procurement. The issue impacted both ALN 84.027 and 84.173. No issues were identified when testing suspension and debarment requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-001 Information on the federal program: Subject: Special Education Cluster (IDEA) - Procurement Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listing Number: 84.027, 84.173 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Significant Deficiency, Other Matters Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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 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 this part. . . .(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 use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. The lack of internal controls was isolated to the Special Education Cluster. Cause: The School Corporation had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were likely questioned costs of $147,319. These costs represent total expenses relating to the two consultants charged to the Special Education Cluster. Context: During testing of procurement over the Special Education Cluster, it was noted that the School Corporation did not obtain an appropriate number of bids relating to Special Education consultants as required under small purchase procurement guidelines. There were two consultants charged to the Special Education Cluster during the audit period with expenses totaling $147,319. One of these consultants was selected during testing for procurement. The issue impacted both ALN 84.027 and 84.173. No issues were identified when testing suspension and debarment requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the Procurement compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.