Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education; All project numbers. Criteria. The Uniform Guidance requires non-federal entities must have and use documented procurement procedures as required under 2 CFR 200.320. For purchases in excess of the micro-purchase threshold, nonfederal entities must at minimum obtain price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity and must be able to document the price or rate quotations obtained as part of this process. Condition. Of the five vendors tested for compliance with procurement requirements, the District could not provide documentation of compliance with procurement standards for one of the vendors tested. While the District appears to have made an informal effort to ensure that costs were reasonable by contacting its group purchasing vendor, the District did not issue or document price and/or rate quotations as required. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements for informal procurement methods as required under Uniform Guidance. Questioned Costs. None. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review its internal procedures to ensure future compliance with and appropriate document of procurement requirements vendor relationships. Responsible Official. Business Manager. Estimated Completion Date. June 30, 2025.
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education; All project numbers. Criteria. The Uniform Guidance requires non-federal entities must have and use documented procurement procedures as required under 2 CFR 200.320. For purchases in excess of the micro-purchase threshold, nonfederal entities must at minimum obtain price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity and must be able to document the price or rate quotations obtained as part of this process. Condition. Of the five vendors tested for compliance with procurement requirements, the District could not provide documentation of compliance with procurement standards for one of the vendors tested. While the District appears to have made an informal effort to ensure that costs were reasonable by contacting its group purchasing vendor, the District did not issue or document price and/or rate quotations as required. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements for informal procurement methods as required under Uniform Guidance. Questioned Costs. None. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review its internal procedures to ensure future compliance with and appropriate document of procurement requirements vendor relationships. Responsible Official. Business Manager. Estimated Completion Date. June 30, 2025.
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education; All project numbers. Criteria. The Uniform Guidance requires non-federal entities must have and use documented procurement procedures as required under 2 CFR 200.320. For purchases in excess of the micro-purchase threshold, nonfederal entities must at minimum obtain price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity and must be able to document the price or rate quotations obtained as part of this process. Condition. Of the five vendors tested for compliance with procurement requirements, the District could not provide documentation of compliance with procurement standards for one of the vendors tested. While the District appears to have made an informal effort to ensure that costs were reasonable by contacting its group purchasing vendor, the District did not issue or document price and/or rate quotations as required. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements for informal procurement methods as required under Uniform Guidance. Questioned Costs. None. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review its internal procedures to ensure future compliance with and appropriate document of procurement requirements vendor relationships. Responsible Official. Business Manager. Estimated Completion Date. June 30, 2025.
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education; All project numbers. Criteria. The Uniform Guidance requires non-federal entities must have and use documented procurement procedures as required under 2 CFR 200.320. For purchases in excess of the micro-purchase threshold, nonfederal entities must at minimum obtain price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity and must be able to document the price or rate quotations obtained as part of this process. Condition. Of the five vendors tested for compliance with procurement requirements, the District could not provide documentation of compliance with procurement standards for one of the vendors tested. While the District appears to have made an informal effort to ensure that costs were reasonable by contacting its group purchasing vendor, the District did not issue or document price and/or rate quotations as required. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements for informal procurement methods as required under Uniform Guidance. Questioned Costs. None. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review its internal procedures to ensure future compliance with and appropriate document of procurement requirements vendor relationships. Responsible Official. Business Manager. Estimated Completion Date. June 30, 2025.
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education; All project numbers. Criteria. The Uniform Guidance requires non-federal entities must have and use documented procurement procedures as required under 2 CFR 200.320. For purchases in excess of the micro-purchase threshold, nonfederal entities must at minimum obtain price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity and must be able to document the price or rate quotations obtained as part of this process. Condition. Of the five vendors tested for compliance with procurement requirements, the District could not provide documentation of compliance with procurement standards for one of the vendors tested. While the District appears to have made an informal effort to ensure that costs were reasonable by contacting its group purchasing vendor, the District did not issue or document price and/or rate quotations as required. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements for informal procurement methods as required under Uniform Guidance. Questioned Costs. None. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review its internal procedures to ensure future compliance with and appropriate document of procurement requirements vendor relationships. Responsible Official. Business Manager. Estimated Completion Date. June 30, 2025.
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education; All project numbers. Criteria. The Uniform Guidance requires non-federal entities must have and use documented procurement procedures as required under 2 CFR 200.320. For purchases in excess of the micro-purchase threshold, nonfederal entities must at minimum obtain price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity and must be able to document the price or rate quotations obtained as part of this process. Condition. Of the five vendors tested for compliance with procurement requirements, the District could not provide documentation of compliance with procurement standards for one of the vendors tested. While the District appears to have made an informal effort to ensure that costs were reasonable by contacting its group purchasing vendor, the District did not issue or document price and/or rate quotations as required. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements for informal procurement methods as required under Uniform Guidance. Questioned Costs. None. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review its internal procedures to ensure future compliance with and appropriate document of procurement requirements vendor relationships. Responsible Official. Business Manager. Estimated Completion Date. June 30, 2025.
Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education; All project numbers. Criteria. The Uniform Guidance requires non-federal entities must have and use documented procurement procedures as required under 2 CFR 200.320. For purchases in excess of the micro-purchase threshold, nonfederal entities must at minimum obtain price or rate quotations from an adequate number of qualified sources as determined appropriate by the non-Federal entity and must be able to document the price or rate quotations obtained as part of this process. Condition. Of the five vendors tested for compliance with procurement requirements, the District could not provide documentation of compliance with procurement standards for one of the vendors tested. While the District appears to have made an informal effort to ensure that costs were reasonable by contacting its group purchasing vendor, the District did not issue or document price and/or rate quotations as required. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements for informal procurement methods as required under Uniform Guidance. Questioned Costs. None. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review its internal procedures to ensure future compliance with and appropriate document of procurement requirements vendor relationships. Responsible Official. Business Manager. Estimated Completion Date. June 30, 2025.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Condition: During our testing we noted that for 2 out of 3 vendors selected for procurement testing there was no documentation to demonstrate that procurement was conducted in full and open competition according to 2CFR section 200.319 or any documentation of the rationale to limit competition in those cases where competition was limited and ascertain if the limitation was justified per 2CFR sections 200.319 and 200.320(f) and 48 CFR section 52.244-5. Criteria: 2 CFR 200.303 requires non-federal entities to, among other things, 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. Effective internal controls should include procedures to ensure procurement files are complete and adequately document decisions made to sole source procurements of goods and services in accordance with the Institute’s procurement policies. Cause: Hubbs-SeaWorld Research Institute’s procurement policy was not in alignment with the procurement compliance requirements stated in 2 CFR 200.303. Effect: Hubbs-SeaWorld Research Institute did not document and maintain records for the procurement of goods and services resulting in noncompliance with the procurement compliance requirements stated in 2 CFR 200.303 during the year ending June 30, 2024. Recommendation: Hubbs-SeaWorld Research Institute should improve its policies and procedures regarding the procurement process and maintain documentation. Management Response: The management staff of Hubbs-SeaWorld Research Institute take very seriously the federal compliance related to the procurement of goods and services. Hubbs-SeaWorld Research Institute acknowledges the finding and has subsequently updated their procurement policy and procedures to be in compliance with 2 CFR 200.303. Management has adopted a plan of action to prevent future instances of non-compliance.
Assistance Listing # 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds Fiscal year finding initially occurred: 2024 Criteria In accordance with 2 CFR 200.320, the City of Scott is required to formally bid contracts that exceed $250,000. Condition The City expended $261,009 of Coronavirus State and Local Fiscal Recovery Funds on a contract that exceeded the required threshold but was not formally bid. Cause The City expended federal funds on contracts that were not properly bid by federal guidelines. Effect As a result, the City was not in compliance with procurement requirements with questioned costs totaling $261,009. Context A sample of 19 transactions were selected for audit from a population of 29 disbursements. The test found that a vendor was not properly contracted. This resulted in questioned costs of $261,009. Recommendation The City should review their policies and procedures to ensure that all contracts that have federal expenditures are properly bid in accordance with 2 CFR 200.320. Management’s Corrective Action Plan The City of Scott will review their policies and procedures to ensure that all contracts that have federal expenditures are properly bid in accordance with 2 CFR 200.320.
Assistance Listing # 21.027 – COVID-19 Coronavirus State and Local Fiscal Recovery Funds Fiscal year finding initially occurred: 2024 Criteria In accordance with 2 CFR 200.320, the City of Scott is required to formally bid contracts that exceed $250,000. Condition The City expended $261,009 of Coronavirus State and Local Fiscal Recovery Funds on a contract that exceeded the required threshold but was not formally bid. Cause The City expended federal funds on contracts that were not properly bid by federal guidelines. Effect As a result, the City was not in compliance with procurement requirements with questioned costs totaling $261,009. Context A sample of 19 transactions were selected for audit from a population of 29 disbursements. The test found that a vendor was not properly contracted. This resulted in questioned costs of $261,009. Recommendation The City should review their policies and procedures to ensure that all contracts that have federal expenditures are properly bid in accordance with 2 CFR 200.320. Management’s Corrective Action Plan The City of Scott will review their policies and procedures to ensure that all contracts that have federal expenditures are properly bid in accordance with 2 CFR 200.320.
2024-001 – Procurement, Suspension and Debarment Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education (MDE); All project numbers. Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. Of the six vendors tested for compliance with procurement requirements, the District was unable to provide documentation for compliance with procurement standards for one vendor tested. The vendor had total expenditures of $81,757 during the current fiscal year. Included in these expenditures was the purchase of equipment in the amount of $30,321 which is in excess of the MDE competitive bid threshold. The District was unable to provide documentation to support that competitive bidding was performed in accordance with the District's policies and procedures and MDE guidelines. Additionally, multiple quotes were not obtained for the remaining purchases not in excess of the MDE competitive bid threshold. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal and MDE requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements as required under Uniform Guidance. Questioned Costs. While there are no questioned costs as all costs were allowable expenditures for the program, we were unable to verify appropriate selection processes as the procurement requirements and policies were not followed. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review the District's internal procedures to ensure future compliance with and appropriate documentation of procurement requirements vendor relationships. Responsible Official. LEA Business Manager Estimated Completion Date. June 30, 2025
2024-001 – Procurement, Suspension and Debarment Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education (MDE); All project numbers. Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. Of the six vendors tested for compliance with procurement requirements, the District was unable to provide documentation for compliance with procurement standards for one vendor tested. The vendor had total expenditures of $81,757 during the current fiscal year. Included in these expenditures was the purchase of equipment in the amount of $30,321 which is in excess of the MDE competitive bid threshold. The District was unable to provide documentation to support that competitive bidding was performed in accordance with the District's policies and procedures and MDE guidelines. Additionally, multiple quotes were not obtained for the remaining purchases not in excess of the MDE competitive bid threshold. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal and MDE requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements as required under Uniform Guidance. Questioned Costs. While there are no questioned costs as all costs were allowable expenditures for the program, we were unable to verify appropriate selection processes as the procurement requirements and policies were not followed. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review the District's internal procedures to ensure future compliance with and appropriate documentation of procurement requirements vendor relationships. Responsible Official. LEA Business Manager Estimated Completion Date. June 30, 2025
2024-001 – Procurement, Suspension and Debarment Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education (MDE); All project numbers. Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. Of the six vendors tested for compliance with procurement requirements, the District was unable to provide documentation for compliance with procurement standards for one vendor tested. The vendor had total expenditures of $81,757 during the current fiscal year. Included in these expenditures was the purchase of equipment in the amount of $30,321 which is in excess of the MDE competitive bid threshold. The District was unable to provide documentation to support that competitive bidding was performed in accordance with the District's policies and procedures and MDE guidelines. Additionally, multiple quotes were not obtained for the remaining purchases not in excess of the MDE competitive bid threshold. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal and MDE requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements as required under Uniform Guidance. Questioned Costs. While there are no questioned costs as all costs were allowable expenditures for the program, we were unable to verify appropriate selection processes as the procurement requirements and policies were not followed. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review the District's internal procedures to ensure future compliance with and appropriate documentation of procurement requirements vendor relationships. Responsible Official. LEA Business Manager Estimated Completion Date. June 30, 2025
2024-001 – Procurement, Suspension and Debarment Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education (MDE); All project numbers. Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. Of the six vendors tested for compliance with procurement requirements, the District was unable to provide documentation for compliance with procurement standards for one vendor tested. The vendor had total expenditures of $81,757 during the current fiscal year. Included in these expenditures was the purchase of equipment in the amount of $30,321 which is in excess of the MDE competitive bid threshold. The District was unable to provide documentation to support that competitive bidding was performed in accordance with the District's policies and procedures and MDE guidelines. Additionally, multiple quotes were not obtained for the remaining purchases not in excess of the MDE competitive bid threshold. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal and MDE requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements as required under Uniform Guidance. Questioned Costs. While there are no questioned costs as all costs were allowable expenditures for the program, we were unable to verify appropriate selection processes as the procurement requirements and policies were not followed. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review the District's internal procedures to ensure future compliance with and appropriate documentation of procurement requirements vendor relationships. Responsible Official. LEA Business Manager Estimated Completion Date. June 30, 2025
2024-001 – Procurement, Suspension and Debarment Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education (MDE); All project numbers. Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. Of the six vendors tested for compliance with procurement requirements, the District was unable to provide documentation for compliance with procurement standards for one vendor tested. The vendor had total expenditures of $81,757 during the current fiscal year. Included in these expenditures was the purchase of equipment in the amount of $30,321 which is in excess of the MDE competitive bid threshold. The District was unable to provide documentation to support that competitive bidding was performed in accordance with the District's policies and procedures and MDE guidelines. Additionally, multiple quotes were not obtained for the remaining purchases not in excess of the MDE competitive bid threshold. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal and MDE requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements as required under Uniform Guidance. Questioned Costs. While there are no questioned costs as all costs were allowable expenditures for the program, we were unable to verify appropriate selection processes as the procurement requirements and policies were not followed. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review the District's internal procedures to ensure future compliance with and appropriate documentation of procurement requirements vendor relationships. Responsible Official. LEA Business Manager Estimated Completion Date. June 30, 2025
2024-001 – Procurement, Suspension and Debarment Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education (MDE); All project numbers. Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. Of the six vendors tested for compliance with procurement requirements, the District was unable to provide documentation for compliance with procurement standards for one vendor tested. The vendor had total expenditures of $81,757 during the current fiscal year. Included in these expenditures was the purchase of equipment in the amount of $30,321 which is in excess of the MDE competitive bid threshold. The District was unable to provide documentation to support that competitive bidding was performed in accordance with the District's policies and procedures and MDE guidelines. Additionally, multiple quotes were not obtained for the remaining purchases not in excess of the MDE competitive bid threshold. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal and MDE requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements as required under Uniform Guidance. Questioned Costs. While there are no questioned costs as all costs were allowable expenditures for the program, we were unable to verify appropriate selection processes as the procurement requirements and policies were not followed. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review the District's internal procedures to ensure future compliance with and appropriate documentation of procurement requirements vendor relationships. Responsible Official. LEA Business Manager Estimated Completion Date. June 30, 2025
2024-001 – Procurement, Suspension and Debarment Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education (MDE); All project numbers. Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. Of the six vendors tested for compliance with procurement requirements, the District was unable to provide documentation for compliance with procurement standards for one vendor tested. The vendor had total expenditures of $81,757 during the current fiscal year. Included in these expenditures was the purchase of equipment in the amount of $30,321 which is in excess of the MDE competitive bid threshold. The District was unable to provide documentation to support that competitive bidding was performed in accordance with the District's policies and procedures and MDE guidelines. Additionally, multiple quotes were not obtained for the remaining purchases not in excess of the MDE competitive bid threshold. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal and MDE requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements as required under Uniform Guidance. Questioned Costs. While there are no questioned costs as all costs were allowable expenditures for the program, we were unable to verify appropriate selection processes as the procurement requirements and policies were not followed. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review the District's internal procedures to ensure future compliance with and appropriate documentation of procurement requirements vendor relationships. Responsible Official. LEA Business Manager Estimated Completion Date. June 30, 2025
2024-001 – Procurement, Suspension and Debarment Finding Type. Material Noncompliance; Material Weakness in Internal Controls over Compliance. Federal program(s) U.S. Department of Education - Child Nutrition Cluster (10.553, 10.555, and 10.559); Passed through the Michigan Department of Education (MDE); All project numbers. Criteria. Recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. Of the six vendors tested for compliance with procurement requirements, the District was unable to provide documentation for compliance with procurement standards for one vendor tested. The vendor had total expenditures of $81,757 during the current fiscal year. Included in these expenditures was the purchase of equipment in the amount of $30,321 which is in excess of the MDE competitive bid threshold. The District was unable to provide documentation to support that competitive bidding was performed in accordance with the District's policies and procedures and MDE guidelines. Additionally, multiple quotes were not obtained for the remaining purchases not in excess of the MDE competitive bid threshold. Cause. The District does not have the proper internal controls in place to ensure that all procurement contracts awarded to vendors have complied with federal and MDE requirements for allowable procurement methods. Effect. The District could not properly document compliance with federal requirements as required under Uniform Guidance. Questioned Costs. While there are no questioned costs as all costs were allowable expenditures for the program, we were unable to verify appropriate selection processes as the procurement requirements and policies were not followed. Recommendation. We recommend that the District reviews its policies and procedures to ensure that applicable procurement requirements are followed and documented when the District enters into new contracts or procurement arrangements with vendors for goods and/or services on federal programs. View of Responsible Officials. District officials will review the District's internal procedures to ensure future compliance with and appropriate documentation of procurement requirements vendor relationships. Responsible Official. LEA Business Manager Estimated Completion Date. June 30, 2025
Federal Agency: U.S. Department of Education Federal Program Title: COVID-19 Elementary and Secondary School Emergency Relief Federal Award Identification Number: S425U210026 Pass-Through Agency: Kentucky Department of Education Pass-Through Entity Identifying Numbers: 473G Assistance Listing Number: 84.425 Award Period: March 24, 2021 to September 30, 2024 Condition: We noted that proper bid procedures were not followed for a flooring replacement project that was completed during the year and whose total cost exceeded $40,000. Criteria: State and federal regulations (KRS 424.260 and 2 CFR 200.320) and Board policy requires that all like items purchased during the fiscal year exceeding $40,000 be purchased through a competitive bidding process or at state/federal contract pricing. Repeat Finding: No. Questioned Costs: $79,620 Effect: Noncompliance with KRS 424.260, 2 CFR 200.320 and Board policy. Recommendation: We recommend that the District implement procedures to ensure compliance with state and federal regulations and Board policy.
Federal Agency: U.S. Department of Education Federal Program Title: COVID-19 Elementary and Secondary School Emergency Relief Federal Award Identification Number: S425U210026 Pass-Through Agency: Kentucky Department of Education Pass-Through Entity Identifying Numbers: 473G Assistance Listing Number: 84.425 Award Period: March 24, 2021 to September 30, 2024 Condition: We noted that proper bid procedures were not followed for a flooring replacement project that was completed during the year and whose total cost exceeded $40,000. Criteria: State and federal regulations (KRS 424.260 and 2 CFR 200.320) and Board policy requires that all like items purchased during the fiscal year exceeding $40,000 be purchased through a competitive bidding process or at state/federal contract pricing. Repeat Finding: No. Questioned Costs: $79,620 Effect: Noncompliance with KRS 424.260, 2 CFR 200.320 and Board policy. Recommendation: We recommend that the District implement procedures to ensure compliance with state and federal regulations and Board policy.
Federal Agency: U.S. Department of Education Federal Program Title: COVID-19 Elementary and Secondary School Emergency Relief Federal Award Identification Number: S425U210026 Pass-Through Agency: Kentucky Department of Education Pass-Through Entity Identifying Numbers: 473G Assistance Listing Number: 84.425 Award Period: March 24, 2021 to September 30, 2024 Condition: We noted that proper bid procedures were not followed for a flooring replacement project that was completed during the year and whose total cost exceeded $40,000. Criteria: State and federal regulations (KRS 424.260 and 2 CFR 200.320) and Board policy requires that all like items purchased during the fiscal year exceeding $40,000 be purchased through a competitive bidding process or at state/federal contract pricing. Repeat Finding: No. Questioned Costs: $79,620 Effect: Noncompliance with KRS 424.260, 2 CFR 200.320 and Board policy. Recommendation: We recommend that the District implement procedures to ensure compliance with state and federal regulations and Board policy.
Procurement Federal Agency: U.S. Federal Government Federal Program Title: Integrative Activities, Research and Development Cluster Assistance Listing Number: 47.083 Federal Award Identification Number and Year: CE2559-SB-873905 A2, A3 - 2024 Award Period: July 1, 2023 to June 30, 2024 Type of Finding: • Other Matters • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University did not complete documentation for reasonings of why they did not obtain price quotes or competitive bids prior to entering the transaction. Context: During our testing we identified 1 of the 5 contracts tested did not include adequate documentation to award the contracts without price quotations or a competitive bid process. Questioned costs: $39,160 Cause: Lack of training for procurement personnel regarding federal funds passed through State agencies to the University. Effect: Documentation for why the University did not obtain price quotes or competitive bids was not documented in a timely manner. Repeat finding: Yes, 2023-003 Recommendation: We recommend the University evaluate its procedures and implement an additional control to document reasons for not obtaining price quotes or competitive bids prior to entering the transaction. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled four contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtained prior to selecting any of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in all four contracts tested. Effect/Questioned Cost: This resulted in roughly $122,215 awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. In addition, we recommend that the District adopt a board policy that addresses procedures related to federal procurement. Views of Responsible Officials: The Purchasing department will develop and maintain procurement procedures requiring that “small purchases” of equipment or services made under a Federal award or sub-award above the micropurchase threshold require multiple quotes and that those quotes are properly documented as evidence.
Finding 2024-001: Incorrect Use of Sole Source Justification Information on the Federal Program: 59.059 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Title 2 U.S. Code of Federal Regulations (CFR) Part 200.320, paragraph 318 “General procurement standards” states noncompetitive (sole source) procurement is allowed only under the following circumstances: - The item is available only from a single source. - There is an exigent or emergency situation that will not permit delay. - The Federal awarding agency or pass-through entity expressly authorizes noncompetitive procurement in writing. - After soliciting multiple sources, competition is deemed inadequate. These rules are designed to ensure open and fair competition in Federal procurement. Condition: MCCC and Affiliate procured goods/services using sole source justification without meeting the required criteria. Specifically, the procurement records did not document why the procurement met one of the allowed exceptions under Uniform Guidance, and competitive procurement methods were not utilized when they should have been. Cause: The Organization did not adhere to its procurement policy in that it failed to perform the prescribed procurement procedures throughout the fiscal year. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that MCCC and Affiliate will not receive the best value for its purchases. The procurement process should also allow for an evaluation of potential conflicts of interest with prospective vendors and contractors. Failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: None noted. Context: 1 out of 1 samples tested did not follow the specific criteria for noncompetitive procurement. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend MCCC and Affiliate provide training to staff on the specific requirements of 2 CFR 200.320 to ensure that they are aware of the conditions under which sole source procurement is allowable.
FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness 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) states: "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." 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 Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness 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) states: "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." 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 Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness 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) states: "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." 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 Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness 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) states: "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." 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 Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
CONDITION: The District used local exemptions in procuring some of the costs related to its ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The District followed its approved procurement code which allowed the use of local exemptions for certain federal procurement activities. The District had received other communications from SDE staff that made them believe that following their procurement code was sufficient in procuring activities for this federal program. The District’s auditors tested approximately $4,786,000 in key items related to the ESSER program and noted no exceptions. The District’s auditors tested a random sample of other ESSER expenditures and noted four procurements of approximately $26,000 where the District used local exemptions. The amount of known procurements extrapolated to the remaining random population resulted in potential noncompetitive procurements of approximately $338,000. The actual known or likely questioned costs is not determinable – as it would be less than the total potential noncompetitive procurements. CAUSE: The District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal purchases in this program. RECOMMENDATION: We recommend that the District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The District agrees with this finding and will adhere to the corrective action plan on page 127 in this audit report.
CONDITION: The District used local exemptions in procuring some of the costs related to its ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The District followed its approved procurement code which allowed the use of local exemptions for certain federal procurement activities. The District had received other communications from SDE staff that made them believe that following their procurement code was sufficient in procuring activities for this federal program. The District’s auditors tested approximately $4,786,000 in key items related to the ESSER program and noted no exceptions. The District’s auditors tested a random sample of other ESSER expenditures and noted four procurements of approximately $26,000 where the District used local exemptions. The amount of known procurements extrapolated to the remaining random population resulted in potential noncompetitive procurements of approximately $338,000. The actual known or likely questioned costs is not determinable – as it would be less than the total potential noncompetitive procurements. CAUSE: The District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal purchases in this program. RECOMMENDATION: We recommend that the District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The District agrees with this finding and will adhere to the corrective action plan on page 127 in this audit report.
CONDITION: The District used local exemptions in procuring some of the costs related to its ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The District followed its approved procurement code which allowed the use of local exemptions for certain federal procurement activities. The District had received other communications from SDE staff that made them believe that following their procurement code was sufficient in procuring activities for this federal program. The District’s auditors tested approximately $4,786,000 in key items related to the ESSER program and noted no exceptions. The District’s auditors tested a random sample of other ESSER expenditures and noted four procurements of approximately $26,000 where the District used local exemptions. The amount of known procurements extrapolated to the remaining random population resulted in potential noncompetitive procurements of approximately $338,000. The actual known or likely questioned costs is not determinable – as it would be less than the total potential noncompetitive procurements. CAUSE: The District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal purchases in this program. RECOMMENDATION: We recommend that the District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The District agrees with this finding and will adhere to the corrective action plan on page 127 in this audit report.
CONDITION: The District used local exemptions in procuring some of the costs related to its ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The District followed its approved procurement code which allowed the use of local exemptions for certain federal procurement activities. The District had received other communications from SDE staff that made them believe that following their procurement code was sufficient in procuring activities for this federal program. The District’s auditors tested approximately $4,786,000 in key items related to the ESSER program and noted no exceptions. The District’s auditors tested a random sample of other ESSER expenditures and noted four procurements of approximately $26,000 where the District used local exemptions. The amount of known procurements extrapolated to the remaining random population resulted in potential noncompetitive procurements of approximately $338,000. The actual known or likely questioned costs is not determinable – as it would be less than the total potential noncompetitive procurements. CAUSE: The District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal purchases in this program. RECOMMENDATION: We recommend that the District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The District agrees with this finding and will adhere to the corrective action plan on page 127 in this audit report.
CONDITION: The District used local exemptions in procuring some of the costs related to its ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CONTEXT AND EFFECT: The OMB’s 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The District followed its approved procurement code which allowed the use of local exemptions for certain federal procurement activities. The District had received other communications from SDE staff that made them believe that following their procurement code was sufficient in procuring activities for this federal program. The District’s auditors tested approximately $14,150,000 in key items related to the ESSER program and noted one procurement of approximately $522,000 where the District used a local exemption. The District’s auditors tested a random sample of other ESSER expenditures and noted sixteen procurements totaling approximately $810,000 where the District used local exemptions. The amount of known procurements extrapolated to the remaining random population resulted in potential noncompetitive procurements of approximately $1,830,000. The actual known or likely questioned costs is not determinable – as it would be less than the total potential noncompetitive procurements. CAUSE: The District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal purchases in this program. RECOMMENDATION: We recommend that the District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The District agrees with this finding and will adhere to the corrective action plan on page 136 in this audit report.
Federal Agency U.S. Department of Education Federal Program Name Higher Educational Institutional Aid Assistance Listing Number 84.031X Federal Award Identification Number and Year " P031X220005 - 2024, P031X230006 - 2024" Pass-Through Agency (if applicable) N/A Pass-Through Number(s) (if applicable) N/A Award Period 7/1/23 - 6/30/24 Compliance Requirement Affected Procurement Type of Finding Internal Control Significant Deficiency Document judgment for your assessment Control finding did not result in material questioned costs-therefore we will document as a SD. Additionally qualitatively failure did not have material impact on compliance. Compliance Not Material Document judgment for your assessment Not greater than 5% and not a systemic failure. Criteria or specific requirement "The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." Condition The College did not have documentation that sole source justification was provided during the procurement process. Questioned costs: N/A Known Likely Context During our testing of 5 procurement transactions, we identified 3 vendors that had sole source justifications however they were not dated to verify that the documentation was provided prior to entering the contract. Cause The College did not have proper documentation to support the procurement process was completed prior to purchase. Effect The College could not be in compliance with federal procurement regulations. Repeat Finding No Recommendation We recommend the College evaluate its procedures to ensure documentation is properly supported within their procurement files. Views of Responsible Officials Management agrees with this finding.
Federal Agency U.S. Department of Education Federal Program Name Higher Educational Institutional Aid Assistance Listing Number 84.031X Federal Award Identification Number and Year " P031X220005 - 2024, P031X230006 - 2024" Pass-Through Agency (if applicable) N/A Pass-Through Number(s) (if applicable) N/A Award Period 7/1/23 - 6/30/24 Compliance Requirement Affected Procurement Type of Finding Internal Control Significant Deficiency Document judgment for your assessment Control finding did not result in material questioned costs-therefore we will document as a SD. Additionally qualitatively failure did not have material impact on compliance. Compliance Not Material Document judgment for your assessment Not greater than 5% and not a systemic failure. Criteria or specific requirement "The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." Condition The College did not have documentation that sole source justification was provided during the procurement process. Questioned costs: N/A Known Likely Context During our testing of 5 procurement transactions, we identified 3 vendors that had sole source justifications however they were not dated to verify that the documentation was provided prior to entering the contract. Cause The College did not have proper documentation to support the procurement process was completed prior to purchase. Effect The College could not be in compliance with federal procurement regulations. Repeat Finding No Recommendation We recommend the College evaluate its procedures to ensure documentation is properly supported within their procurement files. Views of Responsible Officials Management agrees with this finding.