Assistance Listing Number: 21.027 Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Award Number: N/A Federal Award Year: 2023/2024 Pass Through Entity: Chicago Cook Workforce Partnership Criteria: In accordance with 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization is either lacking or has nonconforming written policies and procedures for the following administrative functions, required by0 the Uniform Guidance: 1. Financial management - 2 CFR 200.302(b)(6) - spacing 2. Allowable Costs - 2 CFR 200.302(b)(7) 3. Federal payment - 2 CFR 200.305(b)(1) 4. Procurement - 2 CFR 200.318(a) and 2 CFR 200.318(c)(1) 5. Competition - 2 CFR 200.319(d) 6. Methods of procurement to be followed - 2 CFR 200.320 7. Compensation (Personal Services) - 2 CFR 200.430(a)(1) 8. Compensation (Fringe Benefits - Leave) - 2 CFR 200.431(b)(1) 9. Relocation costs of employees - 2 CFR 200.464(a)(2) 10. Travel costs - 2 CFR 200.474 Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our review of the Organization’s policies and procedures, which were found to be not in accordance with Uniform Guidance. Cause: The Organization was not aware of the specific Uniform Guidance requirements for certain written policies and procedures. Effect: The Organization did not have these policies and procedures in place to reasonably ensure that program functions are achieved effectively, efficiently and in compliance with Federal statutes, regulations, and the terms and conditions of the award. The Organization was not in compliance with the administrative requirements set forth in the Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization design procedures and implement internal control procedures to ensure that the Uniform Guidance administrative requirements are met. Views of Responsible Officials and Corrective Action Plan: See corrective action plan attached to financial statements.
2024-002 – Material Weakness in Compliance and Internal Control over Procurement and Suspension and Debarment Identification of federal programs: U.S. Department of Housing and Urban Development: #14.251 Economic Development Initiative, Community Project Funding, and Misc. Grants, #B-22-CP-AK-0003 Criteria: Part 3 Compliance Supplement Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.327. § 200.318(a) Documented procurement procedures – The recipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327. § 200.318(i) Procurement records - The recipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. § 200.320 Procurement methods – There are three types of procurement methods described: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319. § 200.214 Suspension and debarment – When a non-federal entity enters into a covered transaction, the non-federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The Organization procured certain goods or services from vendors but did not maintain evidence that they followed their procurement policy or the procurement requirements of the federal program. Cause: The Organization’s purchasing policy does not address all of the procurement requirements of Uniform Guidance. The Organization did not maintain sufficient documentation supporting purchases greater than the micro-purchase threshold or relating to suspension and debarment on certain covered transactions. In the period after year end and before the date of fieldwork, there was turnover in management in the Executive Director position so it is possible that competitive bidding was sought, but that the knowledge and communications have been lost during the transition. Effect or potential effect: The Organization is not in compliance with the procurement requirements of the Uniform Guidance. Questioned Costs: None Context: During the course of the audit of the major program, auditors requested copies of the required support for purchases from three vendors. Support was provided for one of the purchases but could not be located for two of the purchases. Identification of Repeat Finding: Not applicable. Recommendations: We recommend that the Organization reviews and revises their procurement policies and procedures to ensure that they align with the requirements of Uniform Guidance. We also recommend that as part of the Organization’s internal control structure over compliance with procurement requirements, to establish monitoring procedures or checklists to ensure that support is obtained from a sufficient number of qualified sources depending on the purchasing threshold and method required to be used, and that evidence is retained to show that vendors were not suspended or debarred before entering into a transaction with them. Views of Responsible Officials: See Corrective Action Plan
Procurement, Suspension and Debarment Criteria Procurement Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements. These procurement standards require, among other provisions, that a non-federal entity must: 1. Meet the general procurement standards in 2 CFR Section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to reliable contractors, and maintaining records to document the history of procurement. 2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. 3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use: a) The micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $50,000. b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. c) Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” Suspension and Debarment Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition During our audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024. Cause MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards. Effect The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions. Questioned Costs None Recommendation MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures. Views of Responsible Officials and Planned Corrective Action MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes. The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2025
Procurement, Suspension and Debarment Criteria Procurement Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements. These procurement standards require, among other provisions, that a non-federal entity must: 1. Meet the general procurement standards in 2 CFR Section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to reliable contractors, and maintaining records to document the history of procurement. 2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. 3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use: a) The micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $50,000. b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. c) Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” Suspension and Debarment Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition During our audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024. Cause MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards. Effect The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions. Questioned Costs None Recommendation MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures. Views of Responsible Officials and Planned Corrective Action MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes. The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2025
Procurement, Suspension and Debarment Criteria Procurement Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow specific procurement standards set out in 2 CFR sections 200.317 through 200.327, which includes documenting the procurement methods used for vendor selection. These procedures are designed to ensure fair competition, cost-effectiveness, and federal requirements. These procurement standards require, among other provisions, that a non-federal entity must: 1. Meet the general procurement standards in 2 CFR Section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to reliable contractors, and maintaining records to document the history of procurement. 2. Conduct all procurement transactions for the acquisition of property or services under a federal award in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. 3. Use documented procurement procedures, consistent with the standards of 2 CFR 200.317 to 320. 2 CFR 200.320 enumerates below the different procurement methods that a non-federal entity should use: a) The micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $50,000. b) Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold. The non-Federal entity is responsible for determining an appropriate simplified acquisition threshold based on internal controls, an evaluation of risk and its documented procurement procedures which must not exceed the threshold established in the FAR. When applicable, a lower simplified acquisition threshold used by the non-Federal entity must be authorized or not prohibited under State, local, or tribal laws or regulations. c) Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b) (1); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” Suspension and Debarment Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition During our audit, MARTA was unable to provide purchase order documentation or contract for eight samples that are above $500. Per current procurement policy, “Purchases of supplies, services, and equipment costing more than five hundred ($500) shall be made by purchase order, unless authorized by a signed contract or Mountain Transit Board Approval”. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the required price or rate quotations for those purchases or contracts with contract amounts above $10,000 were obtained from an adequate number of qualified sources and maintained the documentation to support its conclusion. These were noted for two samples tested. The expenditure paid ranged from $10,000 to $36,000 in 2024. During our audit, MARTA was unable to provide supporting documentation to demonstrate that the process of verifying if vendors are not suspended or debarred was performed on two vendors tested. The expenditure paid to these vendors ranged from $109,000 to $647,000 in 2024. Cause MARTA did not follow its existing purchasing policy and procedures, and lack of procedures in maintaining appropriate records of vendor selection and compliance with procurement standards. Effect The absence of procurement documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances or unnecessary sanctions. Questioned Costs None Recommendation MARTA should strengthen its internal controls over procurement by ensuring that all procurement activities, particularly significant expenditures, are properly documented. This includes retaining evidence that procurement methods required by the Uniform Guidance were followed, such as bids, contracts, or justifications for sole-source vendors. MARTA should also conduct training for staff involved in procurement to ensure awareness and adherence to the policies. Regular internal audits may be implemented to verify compliance with procurement procedures. Views of Responsible Officials and Planned Corrective Action MARTA is in the process of updating the Procurement Policy. MARTA will ensure that updated policies and procedures will be implemented to address compliance and documentation requirements for small and micro-purchases, sole-source, and informal processes. The updated Procurement Policy will be brought to the October 2025 Board of Directors meeting for Board review or approval. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2025
Finding Number Compliance Deficiencies 2024-005 Special Education Cluster: Procurement, Suspension, and Debarment Federal Agency: United States Department of Education Federal program Name: Special Education Cluster Assistance Listing Number: 84.024, 84.173 Federal Award Identification Number and Year: Unknown Pass-through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2024-585264-DPI-FLOW-341, 2024-585264-DPI-PRESCH-347 Award Period: 07/01/2023 – 06/30/2024 Compliance Requirements Affected: Procurement, Suspension, and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2) and that the procurement is vendor aggregate, not single item. Proposals must be solicited from an adequate number of qualified offerors. For purchases greater than $250,000, either a sealed bid or proposal is required. 2 CFR 200.214 requires non-Federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a non-Federal entity enters into a covered transactions with an entity at a lower tier, the non-Federal entity must verify that the entity, as described in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases threshold. These purchases were not supported by an adequate number of quotes (at least two) or proposals to ensure the District is prudent with the monies used towards the program. Additionally, we noted the District does not have procedures in place for verifying that vendors are not debarred, suspended or otherwise excluded. Questioned costs: None Context: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases threshold. In our sample of twelve vendors subject to procurement requirements, we noted the District did not obtain and/or retain documentation for an adequate number of price quotes for one vendor. In our testing of suspension and debarment, we noted that the District did not retain documentation related to suspension and debarment for all three vendors that were selected for testing. Cause: The District did not follow their Federal Funds Procurement and Suspension and Debarment Policy related to appropriate methods of procurement and suspension and debarment. Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) Finding Number Compliance Deficiencies 2024-005 Special Education Cluster: Procurement, Suspension, and Debarment (Continued) Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price quotes or proposals may cause the District to overpay for supplies or services. Additionally, the District could contract with a vendor that has been suspended or debarred from receiving Federal funds. Repeat Finding: No Recommendation: We recommend that the District review its procedures to ensure that the District’s procurement policy and suspension and debarment policy are being consistently followed. We further recommend that the District require all grant administrators to receive training on Federal procurement and suspension and debarment regulations. View of Responsible Officials: There is no disagreement with this audit finding. See corrective action plan.
Finding Number Compliance Deficiencies 2024-005 Special Education Cluster: Procurement, Suspension, and Debarment Federal Agency: United States Department of Education Federal program Name: Special Education Cluster Assistance Listing Number: 84.024, 84.173 Federal Award Identification Number and Year: Unknown Pass-through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2024-585264-DPI-FLOW-341, 2024-585264-DPI-PRESCH-347 Award Period: 07/01/2023 – 06/30/2024 Compliance Requirements Affected: Procurement, Suspension, and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2) and that the procurement is vendor aggregate, not single item. Proposals must be solicited from an adequate number of qualified offerors. For purchases greater than $250,000, either a sealed bid or proposal is required. 2 CFR 200.214 requires non-Federal entities to follow suspension and debarment regulations outlined in 2 CFR part 180. When a non-Federal entity enters into a covered transactions with an entity at a lower tier, the non-Federal entity must verify that the entity, as described in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases threshold. These purchases were not supported by an adequate number of quotes (at least two) or proposals to ensure the District is prudent with the monies used towards the program. Additionally, we noted the District does not have procedures in place for verifying that vendors are not debarred, suspended or otherwise excluded. Questioned costs: None Context: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases threshold. In our sample of twelve vendors subject to procurement requirements, we noted the District did not obtain and/or retain documentation for an adequate number of price quotes for one vendor. In our testing of suspension and debarment, we noted that the District did not retain documentation related to suspension and debarment for all three vendors that were selected for testing. Cause: The District did not follow their Federal Funds Procurement and Suspension and Debarment Policy related to appropriate methods of procurement and suspension and debarment. Section III – Findings and Questioned Costs – Major Federal and State Programs (Continued) Finding Number Compliance Deficiencies 2024-005 Special Education Cluster: Procurement, Suspension, and Debarment (Continued) Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price quotes or proposals may cause the District to overpay for supplies or services. Additionally, the District could contract with a vendor that has been suspended or debarred from receiving Federal funds. Repeat Finding: No Recommendation: We recommend that the District review its procedures to ensure that the District’s procurement policy and suspension and debarment policy are being consistently followed. We further recommend that the District require all grant administrators to receive training on Federal procurement and suspension and debarment regulations. View of Responsible Officials: There is no disagreement with this audit finding. See corrective action plan.
2024-003 Significant Deficiency over Procurement Information on the Federal Program: Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing Number 21.027, U.S. Department of the Treasury. Criteria: All entities under the program, must follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. Condition: We noted the County did not originally follow the procurement standards for their procurement of radio read water meters and installations. The County solicited price quotes for this contract. However, based on the amount of the contract, the County should have solicited a formal bid. Context/Cause: The County did not properly solicit for a formal bid for the radio read water meters and installation contract. The County was notified that the price quotes obtained would not be in compliance with the procurement standards and therefore solicited for a formal bid the contract. Effects: The County was not in compliance with the Federal and State procurement requirements. Recommendation: We recommend that the County implement a process to formally document all procurement actions and ensure the properly procurement based on the monetary amount of the contract. Auditee’s Response: We concur with the finding.
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR part 200 of the Uniform Guidance. 2 CFR §§ 200.318 through 200.326 of the Uniform Guidance outline procurement requirements for all non-payroll direct expenditures. Entities expending federal monies are required to follow Uniform Guidance procurement standards. 2 CFR 200.318(i) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The School District considered the contracts with Educational Service Centers to be noncompetitive procurements; however, the School District was unable to provide documentation that they met the criteria established in 2 CFR 200.320(c) to be considered as such. Due to a lack of internal controls over federal procurement documentation, the District did not properly maintain required supporting documentation. Failure to follow federal procurement standards, may result in the misuse of public funds, loss of "low risk auditee" status, increased audit expenses, loss of future federal awards, findings for recovery or other audit adjustments. The School District should review and follow the established Procurement policy to ensure proper procurement procedures are followed and sufficiently documented.
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR part 200 of the Uniform Guidance. 2 CFR §§ 200.318 through 200.326 of the Uniform Guidance outline procurement requirements for all non-payroll direct expenditures. Entities expending federal monies are required to follow Uniform Guidance procurement standards. 2 CFR 200.318(i) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The School District considered the contracts with Educational Service Centers to be noncompetitive procurements; however, the School District was unable to provide documentation that they met the criteria established in 2 CFR 200.320(c) to be considered as such. Due to a lack of internal controls over federal procurement documentation, the District did not properly maintain required supporting documentation. Failure to follow federal procurement standards, may result in the misuse of public funds, loss of "low risk auditee" status, increased audit expenses, loss of future federal awards, findings for recovery or other audit adjustments. The School District should review and follow the established Procurement policy to ensure proper procurement procedures are followed and sufficiently documented.
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR part 200 of the Uniform Guidance. 2 CFR §§ 200.318 through 200.326 of the Uniform Guidance outline procurement requirements for all non-payroll direct expenditures. Entities expending federal monies are required to follow Uniform Guidance procurement standards. 2 CFR 200.318(i) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The School District considered the contracts with Educational Service Centers to be noncompetitive procurements; however, the School District was unable to provide documentation that they met the criteria established in 2 CFR 200.320(c) to be considered as such. Due to a lack of internal controls over federal procurement documentation, the District did not properly maintain required supporting documentation. Failure to follow federal procurement standards, may result in the misuse of public funds, loss of "low risk auditee" status, increased audit expenses, loss of future federal awards, findings for recovery or other audit adjustments. The School District should review and follow the established Procurement policy to ensure proper procurement procedures are followed and sufficiently documented.
Under 2 CFR 200.318-326, non-federal entities must adhere to procurement standards for purchases made with federal funds. Key requirements include: - Full and Open Competition: Procurement transactions must be conducted to ensure open competition and prevent practices that may unduly restrict competition (2 CFR 200.319(a)). - Documentation of Procurement History: Entities must maintain records that detail the procurement history, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR 200.318(i)). - Use of Non-Competitive Procurement: Non-competitive procurement is only allowed under limited circumstances, such as when the item is available from a single source, there is a public emergency, or after solicitation of multiple sources, competition is deemed inadequate (2 CFR 200.320(c)).The Organization incurred expenditures of approximately $620,000 for the renovation of a community center using federal funds under the SLFRF program. The Organization received two bids for the renovation project. However, full documentation of the process was not maintained. Cause: The Organization did not establish or follow sufficient internal controls to ensure compliance with federal procurement requirements, including maintaining the required documentation for procurement activities. Possible effect: The lack of procurement documentation creates a significant risk that noncompliant practices occurred, such as non-competitive procurement or payments exceeding fair market value.
Federal Agency: U.S. Department of Transportation Federal Program Name: Formula Grants for Rural Areas and Tribal Transit Program Assistance Listing Number: 20.509 Federal Award Identification Number and Year: 2024; FAIN not available. Pass-Through Agency: State of Vermont Agency of Transportation Pass-Through Number(s): EA#COVIDFTA-934 EA#FT202201-704 EA#FT24FLEX-454 EA#CRRSAA22-934 EA#FT23FLEX-064 EA#FT24FLEX-554 EA#FT201806-454 EA#FT23FLEX-454 EA#FT24FLEX-854 EA#FT201806-554 EA#FT23FLEX-554 EA#FT24FLEX-954 EA#FT201806-954 EA#FT23FLEX-954 EA#FT24FORM-454 EA#FT201903-704 EA#FT23FORM-064 EA#FT24FORM-924 EA#FT202104-704 EA#FT23FORM-934 EA#FT24FORM-934 EA#FT202104-954 EA#FT24FLEX-064 Award Period: July 1, 2023 through June 30, 2024 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material weakness in internal control over compliance and material noncompliance (modified opinion) Criteria or specific requirement: The United States Code of Federal Regulations (CFR) Title 2, Part 200.319 indicates procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Additionally, 2 CFR Part 200.320 indicates that for any allowable method chosen, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the requirements of 2 CFR Part 200, Subpart D. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR Part 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR Part 180.300). 2 CFR Part 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: For a sample of five (5) procurement transactions above the micro-purchase threshold, documentation was not maintained to support the procurement, suspension and debarment procedures performed in order to demonstrate compliance with 2 CFR Part 180 and 2 CFR Part 200. Questioned costs: Unknown. Context: Five of five transactions selected for testing in our sample. Cause: Procedures were not designed or implemented to maintain documentation to support compliance with the standards of procurement, suspension and debarment contained in 2 CFR Part 180 and 2 CFR Part 200. Effect: Compliance with the requirements of the federal award could not be demonstrated. Additionally, the lack of internal controls presents additional risk of noncompliance in circumstances where federal expenditures are made to ineligible entities. Repeat Finding: No. Recommendation: We recommend management enhance procedures and controls to ensure documentation is maintained to support all procurements and suspension and debarment verifications related to expenditures from federal award programs. Justification for noncompetitive procurements (i.e., sole source, public exigency, or consent of the awarding agency), should also be documented. Such documentation should be consolidated and maintained in a secure, accessible location. Views of responsible officials: Management agrees with the finding.
Information on the Federal Program U.S. Department of Education – Passed-through New Jersey Department of Education: Education Stabilization Fund (ESF): ESSER III Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Learning Acceleration Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Summer Learning and Enrichment Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Beyond the School Day Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Homeless Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 Criteria or Specific Requirement Per 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards dictates when the value of procurement for property or services exceed the simplified acquisition threshold or a lower threshold established by a non-Federal entity (State of New Jersey), formal procurement methods are required. Condition The School District did not provide evidence that it was in complete compliance with formal procurement methods. Questioned Costs Undetermined. Context Purchases made by the School District in excess of the procurement threshold established by a non-Federal entity (State of New Jersey) did not have supporting documentation available to verify complete compliance with formal procurement methods. Effect or Potential Effect The School District was not in compliance with 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Cause Unknown. Identification as a Repeat Finding See Finding 2023-004. Recommendation That the School District retain evidence that it complied with formal procurement methods as noted in 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.
Information on the Federal Program U.S. Department of Education – Passed-through New Jersey Department of Education: Education Stabilization Fund (ESF): ESSER III Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Learning Acceleration Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Summer Learning and Enrichment Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Beyond the School Day Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Homeless Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 Criteria or Specific Requirement Per 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards dictates when the value of procurement for property or services exceed the simplified acquisition threshold or a lower threshold established by a non-Federal entity (State of New Jersey), formal procurement methods are required. Condition The School District did not provide evidence that it was in complete compliance with formal procurement methods. Questioned Costs Undetermined. Context Purchases made by the School District in excess of the procurement threshold established by a non-Federal entity (State of New Jersey) did not have supporting documentation available to verify complete compliance with formal procurement methods. Effect or Potential Effect The School District was not in compliance with 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Cause Unknown. Identification as a Repeat Finding See Finding 2023-004. Recommendation That the School District retain evidence that it complied with formal procurement methods as noted in 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.
Information on the Federal Program U.S. Department of Education – Passed-through New Jersey Department of Education: Education Stabilization Fund (ESF): ESSER III Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Learning Acceleration Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Summer Learning and Enrichment Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Beyond the School Day Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Homeless Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 Criteria or Specific Requirement Per 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards dictates when the value of procurement for property or services exceed the simplified acquisition threshold or a lower threshold established by a non-Federal entity (State of New Jersey), formal procurement methods are required. Condition The School District did not provide evidence that it was in complete compliance with formal procurement methods. Questioned Costs Undetermined. Context Purchases made by the School District in excess of the procurement threshold established by a non-Federal entity (State of New Jersey) did not have supporting documentation available to verify complete compliance with formal procurement methods. Effect or Potential Effect The School District was not in compliance with 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Cause Unknown. Identification as a Repeat Finding See Finding 2023-004. Recommendation That the School District retain evidence that it complied with formal procurement methods as noted in 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.
Information on the Federal Program U.S. Department of Education – Passed-through New Jersey Department of Education: Education Stabilization Fund (ESF): ESSER III Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Learning Acceleration Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Summer Learning and Enrichment Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Beyond the School Day Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Homeless Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 Criteria or Specific Requirement Per 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards dictates when the value of procurement for property or services exceed the simplified acquisition threshold or a lower threshold established by a non-Federal entity (State of New Jersey), formal procurement methods are required. Condition The School District did not provide evidence that it was in complete compliance with formal procurement methods. Questioned Costs Undetermined. Context Purchases made by the School District in excess of the procurement threshold established by a non-Federal entity (State of New Jersey) did not have supporting documentation available to verify complete compliance with formal procurement methods. Effect or Potential Effect The School District was not in compliance with 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Cause Unknown. Identification as a Repeat Finding See Finding 2023-004. Recommendation That the School District retain evidence that it complied with formal procurement methods as noted in 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.
Information on the Federal Program U.S. Department of Education – Passed-through New Jersey Department of Education: Education Stabilization Fund (ESF): ESSER III Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Learning Acceleration Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Summer Learning and Enrichment Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Beyond the School Day Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Homeless Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 Criteria or Specific Requirement Per 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards dictates when the value of procurement for property or services exceed the simplified acquisition threshold or a lower threshold established by a non-Federal entity (State of New Jersey), formal procurement methods are required. Condition The School District did not provide evidence that it was in complete compliance with formal procurement methods. Questioned Costs Undetermined. Context Purchases made by the School District in excess of the procurement threshold established by a non-Federal entity (State of New Jersey) did not have supporting documentation available to verify complete compliance with formal procurement methods. Effect or Potential Effect The School District was not in compliance with 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Cause Unknown. Identification as a Repeat Finding See Finding 2023-004. Recommendation That the School District retain evidence that it complied with formal procurement methods as noted in 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 2 CFR § 200.320(b) states in part that when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. 2 CFR § 200.318(e) states to foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. 2 CFR §200.320(2)(a) states for small purchases the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Ohio Rev. Code § 167.081, states that a regional council may enter into a unit price contract for materials, labor, services, overhead, profit, and associated expenses for the repair, enlargement, improvement, or demolition of a building or structure if the contract is awarded pursuant to a competitive bidding procedure of a county, municipal corporation, or township or a special district, school district, or other political subdivision that is a council member. A political subdivision that is a member of a regional council may participate in a contract entered into under Ohio Rev. Code § 167.081. Purchases under a contract entered into under Ohio Rev. Code § 167.081 are exempt from any competitive selection or bidding requirements otherwise required by law. Furthermore, the District’s Procurement – Federal Grants/Funds Policy (#6325) details the District’s procedures for procurement with federal funds. Specifically, Maintenance of Procurement Records: The District shall maintain records sufficient to detail the history of all procurements. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (including a cost or price analysis). The District participated in The Ohio Purchasing Council’s unit price contract with Prodigy Building Solutions, LLC., for the School District's roofing, HVAC, and Lighting project, pursuant to Ohio Rev. Code § 167.081. The School District utilized ESSER grant funds for parts of these projects. The School District did not maintain documentation that Ohio Purchasing Council followed competitive bidding procedures of a council member pursuant to O.R.C. 167.081 when awarding the unit price contract to Prodigy Building Solutions respectively, failing to meet the documentation requirements of 2 CFR § 200.320(b) and 2 CFR § 200.318(e) noted above. Failure to comply with the applicable Uniform Guidance Requirements and the Ohio Revised Code could result in misuse of public funds, potential questioned costs, and/or potential loss of grant funding. The District should review its policy, Uniform Guidance requirements, and the Ohio Revised Code before entering into any contracts that require competitive bidding. In addition, the District should fully implement its procurement policy.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 2 CFR § 200.320(b) states in part that when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. 2 CFR § 200.318(e) states to foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. 2 CFR §200.320(2)(a) states for small purchases the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Ohio Rev. Code § 167.081, states that a regional council may enter into a unit price contract for materials, labor, services, overhead, profit, and associated expenses for the repair, enlargement, improvement, or demolition of a building or structure if the contract is awarded pursuant to a competitive bidding procedure of a county, municipal corporation, or township or a special district, school district, or other political subdivision that is a council member. A political subdivision that is a member of a regional council may participate in a contract entered into under Ohio Rev. Code § 167.081. Purchases under a contract entered into under Ohio Rev. Code § 167.081 are exempt from any competitive selection or bidding requirements otherwise required by law. Furthermore, the District’s Procurement – Federal Grants/Funds Policy (#6325) details the District’s procedures for procurement with federal funds. Specifically, Maintenance of Procurement Records: The District shall maintain records sufficient to detail the history of all procurements. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (including a cost or price analysis). The District participated in The Ohio Purchasing Council’s unit price contract with Prodigy Building Solutions, LLC., for the School District's roofing, HVAC, and Lighting project, pursuant to Ohio Rev. Code § 167.081. The School District utilized ESSER grant funds for parts of these projects. The School District did not maintain documentation that Ohio Purchasing Council followed competitive bidding procedures of a council member pursuant to O.R.C. 167.081 when awarding the unit price contract to Prodigy Building Solutions respectively, failing to meet the documentation requirements of 2 CFR § 200.320(b) and 2 CFR § 200.318(e) noted above. Failure to comply with the applicable Uniform Guidance Requirements and the Ohio Revised Code could result in misuse of public funds, potential questioned costs, and/or potential loss of grant funding. The District should review its policy, Uniform Guidance requirements, and the Ohio Revised Code before entering into any contracts that require competitive bidding. In addition, the District should fully implement its procurement policy.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 2 CFR § 200.320(b) states in part that when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. 2 CFR § 200.318(e) states to foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. 2 CFR §200.320(2)(a) states for small purchases the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Ohio Rev. Code § 167.081, states that a regional council may enter into a unit price contract for materials, labor, services, overhead, profit, and associated expenses for the repair, enlargement, improvement, or demolition of a building or structure if the contract is awarded pursuant to a competitive bidding procedure of a county, municipal corporation, or township or a special district, school district, or other political subdivision that is a council member. A political subdivision that is a member of a regional council may participate in a contract entered into under Ohio Rev. Code § 167.081. Purchases under a contract entered into under Ohio Rev. Code § 167.081 are exempt from any competitive selection or bidding requirements otherwise required by law. Furthermore, the District’s Procurement – Federal Grants/Funds Policy (#6325) details the District’s procedures for procurement with federal funds. Specifically, Maintenance of Procurement Records: The District shall maintain records sufficient to detail the history of all procurements. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (including a cost or price analysis). The District participated in The Ohio Purchasing Council’s unit price contract with Prodigy Building Solutions, LLC., for the School District's roofing, HVAC, and Lighting project, pursuant to Ohio Rev. Code § 167.081. The School District utilized ESSER grant funds for parts of these projects. The School District did not maintain documentation that Ohio Purchasing Council followed competitive bidding procedures of a council member pursuant to O.R.C. 167.081 when awarding the unit price contract to Prodigy Building Solutions respectively, failing to meet the documentation requirements of 2 CFR § 200.320(b) and 2 CFR § 200.318(e) noted above. Failure to comply with the applicable Uniform Guidance Requirements and the Ohio Revised Code could result in misuse of public funds, potential questioned costs, and/or potential loss of grant funding. The District should review its policy, Uniform Guidance requirements, and the Ohio Revised Code before entering into any contracts that require competitive bidding. In addition, the District should fully implement its procurement policy.
2 CFR § 3474.1 provides the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 2 CFR § 200.320(b) states in part that when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. 2 CFR § 200.318(e) states to foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. 2 CFR §200.320(2)(a) states for small purchases the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Ohio Rev. Code § 167.081, states that a regional council may enter into a unit price contract for materials, labor, services, overhead, profit, and associated expenses for the repair, enlargement, improvement, or demolition of a building or structure if the contract is awarded pursuant to a competitive bidding procedure of a county, municipal corporation, or township or a special district, school district, or other political subdivision that is a council member. A political subdivision that is a member of a regional council may participate in a contract entered into under Ohio Rev. Code § 167.081. Purchases under a contract entered into under Ohio Rev. Code § 167.081 are exempt from any competitive selection or bidding requirements otherwise required by law. Furthermore, the District’s Procurement – Federal Grants/Funds Policy (#6325) details the District’s procedures for procurement with federal funds. Specifically, Maintenance of Procurement Records: The District shall maintain records sufficient to detail the history of all procurements. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (including a cost or price analysis). The District participated in The Ohio Purchasing Council’s unit price contract with Prodigy Building Solutions, LLC., for the School District's roofing, HVAC, and Lighting project, pursuant to Ohio Rev. Code § 167.081. The School District utilized ESSER grant funds for parts of these projects. The School District did not maintain documentation that Ohio Purchasing Council followed competitive bidding procedures of a council member pursuant to O.R.C. 167.081 when awarding the unit price contract to Prodigy Building Solutions respectively, failing to meet the documentation requirements of 2 CFR § 200.320(b) and 2 CFR § 200.318(e) noted above. Failure to comply with the applicable Uniform Guidance Requirements and the Ohio Revised Code could result in misuse of public funds, potential questioned costs, and/or potential loss of grant funding. The District should review its policy, Uniform Guidance requirements, and the Ohio Revised Code before entering into any contracts that require competitive bidding. In addition, the District should fully implement its procurement policy.
2 CFR 1000.10 gives regulatory effect to the U.S. Department of Treasury for 2 CFR § 200.318 through 200.327 which describe specific procedures non-Federal entities must follow when entering into procurement transactions using Federal funds. 2 CFR § 200.320(a)(2) indicates, in part, when the aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold, but does not exceed the simplified acquisition threshold, simplified acquisition procedures can be used. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined by the recipient or subrecipient. 2 CFR § 200.318(i) indicates the non-Federal entity must maintain records sufficient to detail the history of procurement transaction. These records must include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Due to a lack of controls over the procurement process, for one out of two vendors examined during testing of the Coronavirus State and Local Fiscal Recovery Funds grant, the District did not obtain quotes from other vendors. The procurement was below the simplified acquisition threshold and above the micro-purchase threshold; therefore, small purchase procedures require the District to obtain “price or rate quotations from an adequate number of qualified sources as determined appropriate by” the District. The District’s procurement policy does not specify the number and form of quotations required under small purchasing procedures. Failure to obtain quotations from a variety of vendors may result in the District not utilizing the most cost effective vendor as well as further noncompliance with Federal requirements. The District should adopt procedures to help ensure records are maintained to document the history of the procurement, including the rationale for the purchase method, selection of vendors, cost/price analysis (if applicable) and the reason for limiting competition (if applicable). The District should also amend its procurement policy to indicate the number and form of quotations required when using small purchase procedures.
ESC – Federal Procurement Finding Number: 2024-001 Assistance Listing Number and Title: AL # 84.027 / 84.173 Federal Award Identification Number / Year: 2024 Federal Agency: United States Department of Education Compliance Requirement: Procurement Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No NONCOMPLIANCE AND MATERIAL WEAKNESS Ohio Rev. Code §§ 3313.843 and 3313.845 allow traditional schools to contract with Educational Service Centers (ESCs) to provide services as outlined in the agreement between the two parties. Ohio Rev. Code §3313.843(C) requires these agreements to be filed with the Ohio Department of Education and Workforce by the first day of July of the school year for which the agreement is in effect. Effective on December 26, 2014, 2 CFR § 200.320 outlined the methods of procurement to be followed by state subrecipient non-Federal entities when expending certain types of Federal funds, including those received through Grant Agreements. However, 2 CFR § 200.110(a), created a “grace period” for compliance with 2 CFR §200.320, by permitting non-Federal entities to comply with previously issued Office of Management and Budget procurement guidance for all fiscal years beginning prior to December 26, 2017. In January 2020, the Ohio Department of Education and Workforce (DEW) published a form that allows schools to request DEW authorize a noncompetitive proposal for their ESC Services. This form is available on DEW’s website. During the fiscal year, the School District contracted with Trumbull County Educational Service Center (ESC) to provide purchased services. These services included expenditures of $55,860, which were paid for out of the Special Education Cluster Grants and subject to the Federal procurement laws. The School District did not complete the form that allows schools to request DEW authorize a noncompetitive proposal for their ESC Services that is available on the DEW website. Under 2 CFR §200.320 the School District should have competitively bid the services needed or obtained price quotes from qualified sources as further defined in the School District’s procurement policy. The School District should develop a control(s) and/or procedure(s) to verify that established procurement procedures are followed when entering into contracts using Federal monies. The DEW form that allows schools to request DEW authorize a noncompetitive proposal for their ESC Services should be utilized for any ESC contract in the future. Failure to follow proper procurement procedures could result in contracts awarded to entities which do not meet all the needs of the School District or have a cost significantly higher than their competitors, as well as a loss in future federal funding and possible questioned costs in future audits. Official’s Response: See Corrective Action Plan.
ESC – Federal Procurement Finding Number: 2024-001 Assistance Listing Number and Title: AL # 84.027 / 84.173 Federal Award Identification Number / Year: 2024 Federal Agency: United States Department of Education Compliance Requirement: Procurement Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No NONCOMPLIANCE AND MATERIAL WEAKNESS Ohio Rev. Code §§ 3313.843 and 3313.845 allow traditional schools to contract with Educational Service Centers (ESCs) to provide services as outlined in the agreement between the two parties. Ohio Rev. Code §3313.843(C) requires these agreements to be filed with the Ohio Department of Education and Workforce by the first day of July of the school year for which the agreement is in effect. Effective on December 26, 2014, 2 CFR § 200.320 outlined the methods of procurement to be followed by state subrecipient non-Federal entities when expending certain types of Federal funds, including those received through Grant Agreements. However, 2 CFR § 200.110(a), created a “grace period” for compliance with 2 CFR §200.320, by permitting non-Federal entities to comply with previously issued Office of Management and Budget procurement guidance for all fiscal years beginning prior to December 26, 2017. In January 2020, the Ohio Department of Education and Workforce (DEW) published a form that allows schools to request DEW authorize a noncompetitive proposal for their ESC Services. This form is available on DEW’s website. During the fiscal year, the School District contracted with Trumbull County Educational Service Center (ESC) to provide purchased services. These services included expenditures of $55,860, which were paid for out of the Special Education Cluster Grants and subject to the Federal procurement laws. The School District did not complete the form that allows schools to request DEW authorize a noncompetitive proposal for their ESC Services that is available on the DEW website. Under 2 CFR §200.320 the School District should have competitively bid the services needed or obtained price quotes from qualified sources as further defined in the School District’s procurement policy. The School District should develop a control(s) and/or procedure(s) to verify that established procurement procedures are followed when entering into contracts using Federal monies. The DEW form that allows schools to request DEW authorize a noncompetitive proposal for their ESC Services should be utilized for any ESC contract in the future. Failure to follow proper procurement procedures could result in contracts awarded to entities which do not meet all the needs of the School District or have a cost significantly higher than their competitors, as well as a loss in future federal funding and possible questioned costs in future audits. Official’s Response: See Corrective Action Plan.
ESC – Federal Procurement Finding Number: 2024-001 Assistance Listing Number and Title: AL # 84.027 / 84.173 Federal Award Identification Number / Year: 2024 Federal Agency: United States Department of Education Compliance Requirement: Procurement Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No NONCOMPLIANCE AND MATERIAL WEAKNESS Ohio Rev. Code §§ 3313.843 and 3313.845 allow traditional schools to contract with Educational Service Centers (ESCs) to provide services as outlined in the agreement between the two parties. Ohio Rev. Code §3313.843(C) requires these agreements to be filed with the Ohio Department of Education and Workforce by the first day of July of the school year for which the agreement is in effect. Effective on December 26, 2014, 2 CFR § 200.320 outlined the methods of procurement to be followed by state subrecipient non-Federal entities when expending certain types of Federal funds, including those received through Grant Agreements. However, 2 CFR § 200.110(a), created a “grace period” for compliance with 2 CFR §200.320, by permitting non-Federal entities to comply with previously issued Office of Management and Budget procurement guidance for all fiscal years beginning prior to December 26, 2017. In January 2020, the Ohio Department of Education and Workforce (DEW) published a form that allows schools to request DEW authorize a noncompetitive proposal for their ESC Services. This form is available on DEW’s website. During the fiscal year, the School District contracted with Trumbull County Educational Service Center (ESC) to provide purchased services. These services included expenditures of $55,860, which were paid for out of the Special Education Cluster Grants and subject to the Federal procurement laws. The School District did not complete the form that allows schools to request DEW authorize a noncompetitive proposal for their ESC Services that is available on the DEW website. Under 2 CFR §200.320 the School District should have competitively bid the services needed or obtained price quotes from qualified sources as further defined in the School District’s procurement policy. The School District should develop a control(s) and/or procedure(s) to verify that established procurement procedures are followed when entering into contracts using Federal monies. The DEW form that allows schools to request DEW authorize a noncompetitive proposal for their ESC Services should be utilized for any ESC contract in the future. Failure to follow proper procurement procedures could result in contracts awarded to entities which do not meet all the needs of the School District or have a cost significantly higher than their competitors, as well as a loss in future federal funding and possible questioned costs in future audits. Official’s Response: See Corrective Action Plan.
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Voyager Sopris Learning ($49,117) and Questeq ($70,549). This is a repeat procurement finding from (2023-004) from the previous fiscal year. CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $119,666 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendor –– Beaver Valley Intermediate Unit ($332,200). This is a repeat procurement finding from (2023-005) from the previous fiscal year.CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $332,200 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Voyager Sopris Learning ($49,117) and Questeq ($70,549). This is a repeat procurement finding from (2023-004) from the previous fiscal year. CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $119,666 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendor –– Beaver Valley Intermediate Unit ($332,200). This is a repeat procurement finding from (2023-005) from the previous fiscal year.CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $332,200 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Voyager Sopris Learning ($49,117) and Questeq ($70,549). This is a repeat procurement finding from (2023-004) from the previous fiscal year. CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $119,666 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendor –– Beaver Valley Intermediate Unit ($332,200). This is a repeat procurement finding from (2023-005) from the previous fiscal year.CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $332,200 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
Criteria or Specific Requirement: There are three types of procurement methods described in 2 CFR 200.320 that the City is required to follow under the Uniform Guidance: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. Condition: There are specific circumstances under the Uniform Guidance in which the City may use a noncompetitive procurement method. During our testing, we noted the City's use of the noncompetitive procurement method was inappropriate. Questioned Costs: None. Context: For one out of five samples tested, the City did not properly follow the procurement methods described in CFR 200.320. The City's municipal code allows for exceptions to the bidding requirements of the City's purchasing policy for engineering services. However, it is not one of the circumstances under the Uniform Guidance in which noncompetitive procurement can be used. Cause: The department was not aware of the Uniform Guidance procurement requirements. Effect: The City is not in compliance with the procurement requirements of the Uniform Guidance. Recommendation: We recommend the City implement controls and procedures to ensure procurements with federal funds follow the Uniform Guidance requirements. View of Responsible Officials: There is no disagreement with the audit finding.
Assistance Listing Number, Federal Agency, and Program Name 21.027, U.S. Department of the Treasury, COVID 19 - Coronavirus State and Local Fiscal Recovery Funds, and 93.493, U.S. Department of Health and Human Services, Congressional Directives Federal Award Identification Number and Year 21.027 192908 and 93.493 6 CE2CS52794 01 07 Pass through Entity 21.027 Chicago Department of Public Health; 93.493 N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.319(a) All procurement transactions under the federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and § 200.320(b) covering formal procurement methods. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold (SAT), including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Finally, per 2 CFR 180.300, nonfederal entities must verify that outside parties are not suspended or debarred from engaging in federal activity before entering into a covered transaction. Condition Controls were not sufficient to ensure procurement activities were performed in accordance with 2 CFR 200 and management’s internal policies and procedures related to procurement, suspension, and debarment. Questioned Costs $ 237,890 If Questioned Costs are not Determinable, Description of why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported N/A Identification of How Questioned Costs Were Computed Questioned costs represent expenditures under these contracts reported on the SEFA. Context For three contracts in excess of the Organization's formal procurement threshold ($50,000), management did not retain documentation of having obtained the required number of competitive bids or document rationale for sole procurement, did not document the history of procurement decisions, and was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Cause and Effect A lack of controls to ensure required procurement activities were performed could result in material noncompliance with federal procurement standards. Recommendation We recommend that management retain documented evidence that its policies and procedures were followed to ensure compliance with federal procurement standards. Additionally, we recommend management review its internal procurement policy regularly to ensure compliance with federal procurement standards under 2 CFR 200.317 through 200.327. Views of Responsible Officials and Corrective Action Plan Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Careful consideration was done in selecting the vendors to look at obtaining the best cost for the value of the service as IWS was responsible for a portion of the expenses. Necessary revisions will be made to the existing procurement processes and controls in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name 21.027, U.S. Department of the Treasury, COVID 19 - Coronavirus State and Local Fiscal Recovery Funds, and 93.493, U.S. Department of Health and Human Services, Congressional Directives Federal Award Identification Number and Year 21.027 192908 and 93.493 6 CE2CS52794 01 07 Pass through Entity 21.027 Chicago Department of Public Health; 93.493 N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal 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 Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.319(a) All procurement transactions under the federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and § 200.320(b) covering formal procurement methods. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold (SAT), including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Finally, per 2 CFR 180.300, nonfederal entities must verify that outside parties are not suspended or debarred from engaging in federal activity before entering into a covered transaction. Condition Controls were not sufficient to ensure procurement activities were performed in accordance with 2 CFR 200 and management’s internal policies and procedures related to procurement, suspension, and debarment. Questioned Costs $ 237,890 If Questioned Costs are not Determinable, Description of why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported N/A Identification of How Questioned Costs Were Computed Questioned costs represent expenditures under these contracts reported on the SEFA. Context For three contracts in excess of the Organization's formal procurement threshold ($50,000), management did not retain documentation of having obtained the required number of competitive bids or document rationale for sole procurement, did not document the history of procurement decisions, and was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Cause and Effect A lack of controls to ensure required procurement activities were performed could result in material noncompliance with federal procurement standards. Recommendation We recommend that management retain documented evidence that its policies and procedures were followed to ensure compliance with federal procurement standards. Additionally, we recommend management review its internal procurement policy regularly to ensure compliance with federal procurement standards under 2 CFR 200.317 through 200.327. Views of Responsible Officials and Corrective Action Plan Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Careful consideration was done in selecting the vendors to look at obtaining the best cost for the value of the service as IWS was responsible for a portion of the expenses. Necessary revisions will be made to the existing procurement processes and controls in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Finding No. 2024-004 Procurement Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRFP4547 – 2021 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The Town must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micropurchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Condition: The Town purchasing policy does not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs: None Context: Although the Town’s purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 7 of 7 procurement transactions tested. Cause: Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect: The Town is at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding: No Recommendation: We recommend that the Town update its procurement policies to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials: Management is working with our current auditors to update the Town’s procurement policies to be in compliance with the Uniform Guidance.
2024-009 – Material Weakness and Material Noncompliance – Procurement and Suspension and Debarment U.S. Department of Agriculture Passed through State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program Criteria: Per 2 CFR Part 200.320, “There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319.” 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Uniform Guidance) requires compliance with provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The Town did not have documentation to support they complied with their purchasing policy or Uniform Guidance procurement requirements for three out of six selections. The Town did not have documentation to support it verified four vendors were not suspended or debarred for 4 out of 4 selections. Cause: Due to significant staff turnover within the Greenwich Public Schools finance function during the audit period, established controls related to procurement were not consistently applied or effectively monitored. Effect: Documentation of the requirement for procurement was not maintained. Questioned costs: $119,367 Context: See condition above. Identification as a repeat finding is applicable: N/A Recommendation: We recommend the Town develop and implement a comprehensive plan to address key personnel turnover. This plan should include clearly documented policies and procedures and appropriate cross-training to ensure continuity of operations and maintain adequate internal controls and retention of records. View of Responsible Officials: We agree with the finding. See corrective action plan.
2024-009 – Material Weakness and Material Noncompliance – Procurement and Suspension and Debarment U.S. Department of Agriculture Passed through State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program Criteria: Per 2 CFR Part 200.320, “There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319.” 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Uniform Guidance) requires compliance with provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The Town did not have documentation to support they complied with their purchasing policy or Uniform Guidance procurement requirements for three out of six selections. The Town did not have documentation to support it verified four vendors were not suspended or debarred for 4 out of 4 selections. Cause: Due to significant staff turnover within the Greenwich Public Schools finance function during the audit period, established controls related to procurement were not consistently applied or effectively monitored. Effect: Documentation of the requirement for procurement was not maintained. Questioned costs: $119,367 Context: See condition above. Identification as a repeat finding is applicable: N/A Recommendation: We recommend the Town develop and implement a comprehensive plan to address key personnel turnover. This plan should include clearly documented policies and procedures and appropriate cross-training to ensure continuity of operations and maintain adequate internal controls and retention of records. View of Responsible Officials: We agree with the finding. See corrective action plan.
FA 2024-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Numbers: 225GA324N1099 (Year: 2024), 245GA324N1199 (Year 2024) Questioned Costs: $77,285 Repeat of Prior Year Finding: FA 2023-001 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were reviewed and approved and that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $2,251,765 were expended and reported on the Berrien County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Condition: A sample of 60 expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For three expenditures, evidence of review and approval was not reflected within the voucher package. • For seven expenditures, there was no verification of receipt of goods documented in the voucher package. Additionally, auditor reviewed 40 of these same expenditures and a sample of 20 additional expenditures, which was randomly selected for testing using a non-statistical sampling approach, to determine if procurement transactions complied with the School District’s procurement procedures and proper oversight was maintained to ensure that contractors were performing according to their contracts. The following deficiencies were noted: • Evidence of review and approval was not reflected within the voucher package for five additional expenditures. • For 19 expenditures paid to four different vendors, documentation could not be provided to support the entity’s verification that the vendors were not suspended or debarred or otherwise excluded from participating in the transactions. • One vendor contract expired mid-year and no renewal or extension was initiated. Questioned Costs: Known questioned costs of $77,285 were identified for procurement transactions that did not follow the School District’s procurement procedures and were incurred under an expired contract for which no renewal or extension was initiated. These known questioned costs related to all expenditures occurring after contract expiration, and therefore, should not be projected to a population to determine likely questioned costs. Cause: When discussing the issues noted with management, they said the program director was new and was unaware of the compliance requirements. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance related to CNC. Failure to ensure that expenditures are appropriately approved and procedures to address procurement and suspension and debarment compliance requirements are implemented exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds for unallowable purposes and/or with unqualified vendors. In addition, this deficiency could lead to the return of funding associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to CNC. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review and approval, required procurement methods are properly identified and followed, and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Numbers: 225GA324N1099 (Year: 2024), 245GA324N1199 (Year 2024) Questioned Costs: $77,285 Repeat of Prior Year Finding: FA 2023-001 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were reviewed and approved and that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $2,251,765 were expended and reported on the Berrien County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Condition: A sample of 60 expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For three expenditures, evidence of review and approval was not reflected within the voucher package. • For seven expenditures, there was no verification of receipt of goods documented in the voucher package. Additionally, auditor reviewed 40 of these same expenditures and a sample of 20 additional expenditures, which was randomly selected for testing using a non-statistical sampling approach, to determine if procurement transactions complied with the School District’s procurement procedures and proper oversight was maintained to ensure that contractors were performing according to their contracts. The following deficiencies were noted: • Evidence of review and approval was not reflected within the voucher package for five additional expenditures. • For 19 expenditures paid to four different vendors, documentation could not be provided to support the entity’s verification that the vendors were not suspended or debarred or otherwise excluded from participating in the transactions. • One vendor contract expired mid-year and no renewal or extension was initiated. Questioned Costs: Known questioned costs of $77,285 were identified for procurement transactions that did not follow the School District’s procurement procedures and were incurred under an expired contract for which no renewal or extension was initiated. These known questioned costs related to all expenditures occurring after contract expiration, and therefore, should not be projected to a population to determine likely questioned costs. Cause: When discussing the issues noted with management, they said the program director was new and was unaware of the compliance requirements. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance related to CNC. Failure to ensure that expenditures are appropriately approved and procedures to address procurement and suspension and debarment compliance requirements are implemented exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds for unallowable purposes and/or with unqualified vendors. In addition, this deficiency could lead to the return of funding associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to CNC. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review and approval, required procurement methods are properly identified and followed, and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
2 CFR § 400.1 gives regulatory effect for the U.S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.320(a)(2) indicates, in part, when the aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold, but does not exceed the simplified acquisition threshold, simplified acquisition procedures can be used. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined by the recipient or subrecipient. 2 CFR § 200.318(i) indicates the non-Federal entity must maintain records sufficient to detail the history of procurement transaction. These records must include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Perkins Local School District Board Policy DECA - Administration of Federal Grant Funds indicates all purchases for property and services made using federal funds must be conducted in accordance with all applicable Federal, State and local laws and regulations, the Uniform Guidance, and the District’s written policies and procedures. Purchasing records are sufficiently maintained to detail the history of all procurements and must include at least the rationale for the method of procurement, selection of contract type, and contractor selection or rejection; the basis for the contract price; and verification that the contractor is not suspended or debarred. Furthermore, Perkins Local School District Board Policy DJC - Bidding Requirements states that if feasible, all purchases over $5,000 but under $50,000 will be based on price quotations submitted by at least three vendors. Due to a lack of controls over the procurement process, for one out of four (25%) vendors examined during testing of the Child Nutrition Cluster, the District did not obtain quotes from other vendors. The procurements totaled $9,376; therefore, the District’s bidding policy required the District to obtain “quotations submitted by at least three vendors.” Failure to obtain quotations from a variety of vendors may result in the District not utilizing the most cost effective vendor as well as further noncompliance with Federal requirements. The District should adopt procedures to help ensure records are maintained to document the history of the procurement, including the rationale for the purchase method, selection of vendors, cost/price analysis (if applicable) and the reason for limiting competition (if applicable).
2 CFR § 400.1 gives regulatory effect for the U.S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.320(a)(2) indicates, in part, when the aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold, but does not exceed the simplified acquisition threshold, simplified acquisition procedures can be used. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined by the recipient or subrecipient. 2 CFR § 200.318(i) indicates the non-Federal entity must maintain records sufficient to detail the history of procurement transaction. These records must include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Perkins Local School District Board Policy DECA - Administration of Federal Grant Funds indicates all purchases for property and services made using federal funds must be conducted in accordance with all applicable Federal, State and local laws and regulations, the Uniform Guidance, and the District’s written policies and procedures. Purchasing records are sufficiently maintained to detail the history of all procurements and must include at least the rationale for the method of procurement, selection of contract type, and contractor selection or rejection; the basis for the contract price; and verification that the contractor is not suspended or debarred. Furthermore, Perkins Local School District Board Policy DJC - Bidding Requirements states that if feasible, all purchases over $5,000 but under $50,000 will be based on price quotations submitted by at least three vendors. Due to a lack of controls over the procurement process, for one out of four (25%) vendors examined during testing of the Child Nutrition Cluster, the District did not obtain quotes from other vendors. The procurements totaled $9,376; therefore, the District’s bidding policy required the District to obtain “quotations submitted by at least three vendors.” Failure to obtain quotations from a variety of vendors may result in the District not utilizing the most cost effective vendor as well as further noncompliance with Federal requirements. The District should adopt procedures to help ensure records are maintained to document the history of the procurement, including the rationale for the purchase method, selection of vendors, cost/price analysis (if applicable) and the reason for limiting competition (if applicable).
2 CFR § 400.1 gives regulatory effect for the U.S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR § 200.320(a)(2) indicates, in part, when the aggregate dollar amount of the procurement transaction is higher than the micro-purchase threshold, but does not exceed the simplified acquisition threshold, simplified acquisition procedures can be used. If simplified acquisition procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined by the recipient or subrecipient. 2 CFR § 200.318(i) indicates the non-Federal entity must maintain records sufficient to detail the history of procurement transaction. These records must include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Perkins Local School District Board Policy DECA - Administration of Federal Grant Funds indicates all purchases for property and services made using federal funds must be conducted in accordance with all applicable Federal, State and local laws and regulations, the Uniform Guidance, and the District’s written policies and procedures. Purchasing records are sufficiently maintained to detail the history of all procurements and must include at least the rationale for the method of procurement, selection of contract type, and contractor selection or rejection; the basis for the contract price; and verification that the contractor is not suspended or debarred. Furthermore, Perkins Local School District Board Policy DJC - Bidding Requirements states that if feasible, all purchases over $5,000 but under $50,000 will be based on price quotations submitted by at least three vendors. Due to a lack of controls over the procurement process, for one out of four (25%) vendors examined during testing of the Child Nutrition Cluster, the District did not obtain quotes from other vendors. The procurements totaled $9,376; therefore, the District’s bidding policy required the District to obtain “quotations submitted by at least three vendors.” Failure to obtain quotations from a variety of vendors may result in the District not utilizing the most cost effective vendor as well as further noncompliance with Federal requirements. The District should adopt procedures to help ensure records are maintained to document the history of the procurement, including the rationale for the purchase method, selection of vendors, cost/price analysis (if applicable) and the reason for limiting competition (if applicable).
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS00109-22; H80CS00109-23 Award Period: May 1, 2023 – April 30, 2024; May 1, 2024 – April 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR section 200.320 outlines the acceptable methods of procurement. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require that price or rate quotations be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Noncompetitive procurement can be used in certain circumstances however the non-Federal entity is to maintain appropriate supporting documentation justifying the use of sole source procurement consistent with 2 CFR 200.320(c). Condition: The organization did not maintain appropriate documentation to support the procurement method utilized for a contract selected for testing. Questioned costs: None Context: One (1) of five (5) procurement transactions selected for testing. Cause: The Organization did not create and maintain appropriate documentation to support the method of procurement utilized, including the consideration of an adequate number of qualified sources. Effect: Possible noncompliance with 2 CFR section 200.320(c)(1) - (3) Repeat Finding: No. Recommendation: We recommend the Organization consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the method of procurement utilized. The Organization may also consider qualifying multiple vendors for particular goods/service and then utilizing an approved vendors list. Views of responsible officials: There is no disagreement with this finding.
2024-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College will follow its policies as required.
2024-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College will follow its policies as required.
2024-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College will follow its policies as required.
2024-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College will follow its policies as required.
2024-005 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance (Repeat of Finding 2023-006 and 2022-004) Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, all procurement transactions under the federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. Management’s Response: The College will follow its policies as required.
Prior Year Finding: 2023-004 Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2023 6/30/2024) Compliance Requirement: Procurement Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply 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). Compliance: Per 2 CFR section 200.318, a non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. Per 2 CFR section 200.319, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and § 200.320. Per the Towns purchasing policy, goods or services costing $10,000 or more must be purchased from the lowest responsive bidder meeting specifications after advertising for bids. Condition/Context: The Town failed to provide documentation supporting compliance with required procurement processes for goods or services exceeding $10,000 for five out of five vendors tested. This includes a lack of evidence on how these vendors were selected and whether the procurement process ensured full and open competition. Questioned Costs: Unknown. Cause: The Town's internal controls were not sufficient to ensure that procurement policies were followed for purchases made for the program. Effect: Failure to adhere to procurement policies and procedures may result in obtaining goods or services under terms that are not in the best interest of the federal program. Recommendation: We recommend that the Town enhance its procedures and internal controls to ensure that it verifies vendors are not suspended or debarred from business prior to all goods and services charged to the program. The Town should retain documentation of procurement suspension/debarment status verifications for its vendors audit purposes. Views of Responsible Officials: Management agrees with the finding.