FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 Information on the federal program: Subject: Child Nutrition Cluster – Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 22-23, FY 23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the one small purchase method procurement sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The sample item amount disbursed was $77,700 for food service equipment maintenance in FY23. The School Corporation did properly perform a suspension and debarment check on the vendor. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
CONDITION: The District used local exemptions in procuring some of the costs related to its ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The District followed its approved procurement code which allowed the use of local exemptions for certain federal procurement activities. The District had received other communications from SDE staff that made them believe that following their procurement code was sufficient in procuring activities for this federal program. The District’s auditors tested approximately $4,786,000 in key items related to the ESSER program and noted no exceptions. The District’s auditors tested a random sample of other ESSER expenditures and noted four procurements of approximately $26,000 where the District used local exemptions. The amount of known procurements extrapolated to the remaining random population resulted in potential noncompetitive procurements of approximately $338,000. The actual known or likely questioned costs is not determinable – as it would be less than the total potential noncompetitive procurements. CAUSE: The District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal purchases in this program. RECOMMENDATION: We recommend that the District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The District agrees with this finding and will adhere to the corrective action plan on page 127 in this audit report.
CONDITION: The District used local exemptions in procuring some of the costs related to its ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The District followed its approved procurement code which allowed the use of local exemptions for certain federal procurement activities. The District had received other communications from SDE staff that made them believe that following their procurement code was sufficient in procuring activities for this federal program. The District’s auditors tested approximately $4,786,000 in key items related to the ESSER program and noted no exceptions. The District’s auditors tested a random sample of other ESSER expenditures and noted four procurements of approximately $26,000 where the District used local exemptions. The amount of known procurements extrapolated to the remaining random population resulted in potential noncompetitive procurements of approximately $338,000. The actual known or likely questioned costs is not determinable – as it would be less than the total potential noncompetitive procurements. CAUSE: The District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal purchases in this program. RECOMMENDATION: We recommend that the District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The District agrees with this finding and will adhere to the corrective action plan on page 127 in this audit report.
CONDITION: The District used local exemptions in procuring some of the costs related to its ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The District followed its approved procurement code which allowed the use of local exemptions for certain federal procurement activities. The District had received other communications from SDE staff that made them believe that following their procurement code was sufficient in procuring activities for this federal program. The District’s auditors tested approximately $4,786,000 in key items related to the ESSER program and noted no exceptions. The District’s auditors tested a random sample of other ESSER expenditures and noted four procurements of approximately $26,000 where the District used local exemptions. The amount of known procurements extrapolated to the remaining random population resulted in potential noncompetitive procurements of approximately $338,000. The actual known or likely questioned costs is not determinable – as it would be less than the total potential noncompetitive procurements. CAUSE: The District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal purchases in this program. RECOMMENDATION: We recommend that the District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The District agrees with this finding and will adhere to the corrective action plan on page 127 in this audit report.
CONDITION: The District used local exemptions in procuring some of the costs related to its ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The District followed its approved procurement code which allowed the use of local exemptions for certain federal procurement activities. The District had received other communications from SDE staff that made them believe that following their procurement code was sufficient in procuring activities for this federal program. The District’s auditors tested approximately $4,786,000 in key items related to the ESSER program and noted no exceptions. The District’s auditors tested a random sample of other ESSER expenditures and noted four procurements of approximately $26,000 where the District used local exemptions. The amount of known procurements extrapolated to the remaining random population resulted in potential noncompetitive procurements of approximately $338,000. The actual known or likely questioned costs is not determinable – as it would be less than the total potential noncompetitive procurements. CAUSE: The District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal purchases in this program. RECOMMENDATION: We recommend that the District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The District agrees with this finding and will adhere to the corrective action plan on page 127 in this audit report.
CONDITION: The District used local exemptions in procuring some of the costs related to its ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CONTEXT AND EFFECT: The OMB’s 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The District followed its approved procurement code which allowed the use of local exemptions for certain federal procurement activities. The District had received other communications from SDE staff that made them believe that following their procurement code was sufficient in procuring activities for this federal program. The District’s auditors tested approximately $14,150,000 in key items related to the ESSER program and noted one procurement of approximately $522,000 where the District used a local exemption. The District’s auditors tested a random sample of other ESSER expenditures and noted sixteen procurements totaling approximately $810,000 where the District used local exemptions. The amount of known procurements extrapolated to the remaining random population resulted in potential noncompetitive procurements of approximately $1,830,000. The actual known or likely questioned costs is not determinable – as it would be less than the total potential noncompetitive procurements. CAUSE: The District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal purchases in this program. RECOMMENDATION: We recommend that the District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The District agrees with this finding and will adhere to the corrective action plan on page 136 in this audit report.
Federal Agency U.S. Department of Education Federal Program Name Higher Educational Institutional Aid Assistance Listing Number 84.031X Federal Award Identification Number and Year " P031X220005 - 2024, P031X230006 - 2024" Pass-Through Agency (if applicable) N/A Pass-Through Number(s) (if applicable) N/A Award Period 7/1/23 - 6/30/24 Compliance Requirement Affected Procurement Type of Finding Internal Control Significant Deficiency Document judgment for your assessment Control finding did not result in material questioned costs-therefore we will document as a SD. Additionally qualitatively failure did not have material impact on compliance. Compliance Not Material Document judgment for your assessment Not greater than 5% and not a systemic failure. Criteria or specific requirement "The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." Condition The College did not have documentation that sole source justification was provided during the procurement process. Questioned costs: N/A Known Likely Context During our testing of 5 procurement transactions, we identified 3 vendors that had sole source justifications however they were not dated to verify that the documentation was provided prior to entering the contract. Cause The College did not have proper documentation to support the procurement process was completed prior to purchase. Effect The College could not be in compliance with federal procurement regulations. Repeat Finding No Recommendation We recommend the College evaluate its procedures to ensure documentation is properly supported within their procurement files. Views of Responsible Officials Management agrees with this finding.
Federal Agency U.S. Department of Education Federal Program Name Higher Educational Institutional Aid Assistance Listing Number 84.031X Federal Award Identification Number and Year " P031X220005 - 2024, P031X230006 - 2024" Pass-Through Agency (if applicable) N/A Pass-Through Number(s) (if applicable) N/A Award Period 7/1/23 - 6/30/24 Compliance Requirement Affected Procurement Type of Finding Internal Control Significant Deficiency Document judgment for your assessment Control finding did not result in material questioned costs-therefore we will document as a SD. Additionally qualitatively failure did not have material impact on compliance. Compliance Not Material Document judgment for your assessment Not greater than 5% and not a systemic failure. Criteria or specific requirement "The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." Condition The College did not have documentation that sole source justification was provided during the procurement process. Questioned costs: N/A Known Likely Context During our testing of 5 procurement transactions, we identified 3 vendors that had sole source justifications however they were not dated to verify that the documentation was provided prior to entering the contract. Cause The College did not have proper documentation to support the procurement process was completed prior to purchase. Effect The College could not be in compliance with federal procurement regulations. Repeat Finding No Recommendation We recommend the College evaluate its procedures to ensure documentation is properly supported within their procurement files. Views of Responsible Officials Management agrees with this finding.
Federal Agency U.S. Department of Education Federal Program Name Higher Educational Institutional Aid Assistance Listing Number 84.031X Federal Award Identification Number and Year " P031X220005 - 2024, P031X230006 - 2024" Pass-Through Agency (if applicable) N/A Pass-Through Number(s) (if applicable) N/A Award Period 7/1/23 - 6/30/24 Compliance Requirement Affected Procurement Type of Finding Internal Control Significant Deficiency Document judgment for your assessment Control finding did not result in material questioned costs-therefore we will document as a SD. Additionally qualitatively failure did not have material impact on compliance. Compliance Not Material Document judgment for your assessment Not greater than 5% and not a systemic failure. Criteria or specific requirement "The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.320. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." Condition The College did not have documentation that sole source justification was provided during the procurement process. Questioned costs: N/A Known Likely Context During our testing of 5 procurement transactions, we identified 3 vendors that had sole source justifications however they were not dated to verify that the documentation was provided prior to entering the contract. Cause The College did not have proper documentation to support the procurement process was completed prior to purchase. Effect The College could not be in compliance with federal procurement regulations. Repeat Finding No Recommendation We recommend the College evaluate its procedures to ensure documentation is properly supported within their procurement files. Views of Responsible Officials Management agrees with this finding.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Condition: During our testing of procurement, we sampled three contracts that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with CFR and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in one of three vendors tested. Effect/Questioned Cost: This resulted in roughly $53,291 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: To correct the finding Nutrition Services will do the following: (1) request piggybackable formal bid options from US Foods (2) take necessary steps to increase micropurchase threshold to $50,000 (3) consider opening a Purchase Order with Sysco Foods to spread the micropurchases to another online retailer, thus mitigating the issue of in-person shopping and price comparisons (4) work with purchasing department to ensure open purchase orders do not exceed $50,000 for any vendor that does not have formal procurement in place.
CONDITION: The School District used local exemptions in procuring certain costs related to goods and services funded through the ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CRITERIA, CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The School District followed its approved procurement code which allowed the use of local exemptions for certain procurement activities. The School District’s auditors tested approximately $1,748,000 in key items related to the ESSER program and noted no exceptions. The School District’s auditors tested a random sample of 27 other ESSER expenditures and noted three procurements totaling approximately $137,000 that were procured using local exemptions. This known noncompliance extrapolated to the remaining random population resulted in projected noncompliance of approximately $892,000. The actual known or likely questioned costs is not determinable – as it would be difference between the costs paid and the costs that would have been paid if the contracts were competitively bid. CAUSE: The School District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal procurements. RECOMMENDATION: We recommend that the School District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The School District agrees with this finding and will adhere to the corrective action plan on page 15 in this compliance report. The District discovered this issue prior to the end of the Fiscal Year and made adjustments to the Procurement process between the Office of Federal Programs and Financial Services which now follows the SCDE's accepted practice for federal funds.
CONDITION: The School District used local exemptions in procuring certain costs related to goods and services funded through the ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CRITERIA, CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The School District followed its approved procurement code which allowed the use of local exemptions for certain procurement activities. The School District’s auditors tested approximately $1,748,000 in key items related to the ESSER program and noted no exceptions. The School District’s auditors tested a random sample of 27 other ESSER expenditures and noted three procurements totaling approximately $137,000 that were procured using local exemptions. This known noncompliance extrapolated to the remaining random population resulted in projected noncompliance of approximately $892,000. The actual known or likely questioned costs is not determinable – as it would be difference between the costs paid and the costs that would have been paid if the contracts were competitively bid. CAUSE: The School District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal procurements. RECOMMENDATION: We recommend that the School District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The School District agrees with this finding and will adhere to the corrective action plan on page 15 in this compliance report. The District discovered this issue prior to the end of the Fiscal Year and made adjustments to the Procurement process between the Office of Federal Programs and Financial Services which now follows the SCDE's accepted practice for federal funds.
CONDITION: The School District used local exemptions in procuring certain costs related to goods and services funded through the ESSER program. CRITERIA: The South Carolina Department of Education (“SDE”) had issued a memorandum (“Memorandum”) in August 2023 notifying school districts that local exemptions could not be used in procurement activities related to federal programs. If a school district wanted to use noncompetitive procurements, they would need to (a) meet the exceptions noted in this Memorandum and as more fully detailed in Office of Management and Budget (“OMB”) 2 CFR 200.320 or (b) request and receive an approved waiver from the SDE on the “Request for Noncompetitive Procurement Approval” form. CRITERIA, CONTEXT AND EFFECT: The Office of Management and Budget’s (“OMB”) 2024 compliance supplement did not list in the compliance matrix a requirement to test the “Procurement and Suspension and Debarment” compliance requirement for this program. However, the SDE required that this compliance requirement be tested. The School District followed its approved procurement code which allowed the use of local exemptions for certain procurement activities. The School District’s auditors tested approximately $1,748,000 in key items related to the ESSER program and noted no exceptions. The School District’s auditors tested a random sample of 27 other ESSER expenditures and noted three procurements totaling approximately $137,000 that were procured using local exemptions. This known noncompliance extrapolated to the remaining random population resulted in projected noncompliance of approximately $892,000. The actual known or likely questioned costs is not determinable – as it would be difference between the costs paid and the costs that would have been paid if the contracts were competitively bid. CAUSE: The School District was not fully aware that using its local exemptions as provided for in its procurement code was not allowable for federal procurements. RECOMMENDATION: We recommend that the School District ensure that procurements related to federal programs do not use local exemptions and that these procurements provide for full and open competition. RESPONSE: The School District agrees with this finding and will adhere to the corrective action plan on page 15 in this compliance report. The District discovered this issue prior to the end of the Fiscal Year and made adjustments to the Procurement process between the Office of Federal Programs and Financial Services which now follows the SCDE's accepted practice for federal funds.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster – Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023, FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . .” 2 CFR 200.320 states in part: “The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . “ 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. The School Corporation’s policy states that the small purchase threshold is between $10,000 and $150,000. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2023, two vendors, totaling $109,657 and $53,441, were selected for testing at the small purchase threshold. The School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. During the audit period, there were ten vendors identified which exceeded $25,000 in disbursements on an annual basis. Six vendors were selected for testing. In one instance, the School Corporation’s contract with the vendor did not include any suspension and debarment clause and the School Corporation did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance was systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include documenting the procurement process taken by management for transactions with vendors exceeding the simplified acquisition and small purchase thresholds. When utilizing vendors providing specialized services, documentation should be prepared and maintained by management to support sole source procurement decisions when competitive is limited due to the nature of the service. We also recommend implement an annual control to review and document suspension and debarment checks for all vendors funded with Child Nutrition Cluster grant funds that meet the covered transaction threshold of $25,000. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster – Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023, FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . .” 2 CFR 200.320 states in part: “The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . “ 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. The School Corporation’s policy states that the small purchase threshold is between $10,000 and $150,000. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2023, two vendors, totaling $109,657 and $53,441, were selected for testing at the small purchase threshold. The School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. During the audit period, there were ten vendors identified which exceeded $25,000 in disbursements on an annual basis. Six vendors were selected for testing. In one instance, the School Corporation’s contract with the vendor did not include any suspension and debarment clause and the School Corporation did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance was systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include documenting the procurement process taken by management for transactions with vendors exceeding the simplified acquisition and small purchase thresholds. When utilizing vendors providing specialized services, documentation should be prepared and maintained by management to support sole source procurement decisions when competitive is limited due to the nature of the service. We also recommend implement an annual control to review and document suspension and debarment checks for all vendors funded with Child Nutrition Cluster grant funds that meet the covered transaction threshold of $25,000. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster – Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023, FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . .” 2 CFR 200.320 states in part: “The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . “ 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. The School Corporation’s policy states that the small purchase threshold is between $10,000 and $150,000. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2023, two vendors, totaling $109,657 and $53,441, were selected for testing at the small purchase threshold. The School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. During the audit period, there were ten vendors identified which exceeded $25,000 in disbursements on an annual basis. Six vendors were selected for testing. In one instance, the School Corporation’s contract with the vendor did not include any suspension and debarment clause and the School Corporation did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance was systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include documenting the procurement process taken by management for transactions with vendors exceeding the simplified acquisition and small purchase thresholds. When utilizing vendors providing specialized services, documentation should be prepared and maintained by management to support sole source procurement decisions when competitive is limited due to the nature of the service. We also recommend implement an annual control to review and document suspension and debarment checks for all vendors funded with Child Nutrition Cluster grant funds that meet the covered transaction threshold of $25,000. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-001 Information on the federal program: Subject: Child Nutrition Cluster – Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program, Summer Food Program, School Summer Food Service Program Assistance Listing Number: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023, FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . .” 2 CFR 200.320 states in part: “The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . “ 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Child Nutrition Program and Procurement and Suspension and Debarment compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish internal controls enabled noncompliance to go undetected. The failure to comply with the grant agreement and the compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $50,000 or under, and small purchase procedures for those purchases above the micropurchase threshold, but below the simplified acquisition threshold. The School Corporation’s policy states that the small purchase threshold is between $10,000 and $150,000. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. For fiscal year 2023, two vendors, totaling $109,657 and $53,441, were selected for testing at the small purchase threshold. The School Corporation did not obtain price or rate quotes nor was there documentation detailing the history of procurement, which must include the reason for the procurement method used. The lack of internal controls and noncompliance was isolated to fiscal year 2023. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. “Covered transactions” include but are not limited to contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. During the audit period, there were ten vendors identified which exceeded $25,000 in disbursements on an annual basis. Six vendors were selected for testing. In one instance, the School Corporation’s contract with the vendor did not include any suspension and debarment clause and the School Corporation did not verify the vendor’s suspension and debarment status prior to payment. The lack of internal controls and noncompliance was systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish and implement control procedures to ensure compliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. This should include documenting the procurement process taken by management for transactions with vendors exceeding the simplified acquisition and small purchase thresholds. When utilizing vendors providing specialized services, documentation should be prepared and maintained by management to support sole source procurement decisions when competitive is limited due to the nature of the service. We also recommend implement an annual control to review and document suspension and debarment checks for all vendors funded with Child Nutrition Cluster grant funds that meet the covered transaction threshold of $25,000. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORETABLE INSTANCES OF NONCOMPLIANCE– U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER – FEDERAL ALN 84.027 AND 84.173 2024-002 Internal Control Over Compliance and Reportable Noncompliance With Federal Procurement Requirements Criteria – 2CFR § 200.320 requires the District to establish and maintain effective internal control over compliance with procurement requirements applicable to expenditures within its special education cluster federal programs. Condition – Our testing indicated that the District did not have sufficient controls in place within its special education cluster federal programs to ensure compliance with federal procurement requirements related to methods of procurement, which resulted in reportable instances of noncompliance. Questioned Costs – $92,850. Context – For two of six vendors tested, the District did not obtain two or more quotations for contracts awarded in excess of its stated micro-purchase threshold of $10,000 within its special education cluster federal programs, as required by the Uniform Guidance. All contracts required to be awarded based on multiple quotations within the District’s special education cluster federal programs were tested. Repeat Finding – This is a current year finding. Cause – The District’s internal control procedures over procurement requirements applicable to its special education cluster federal programs were not being consistently followed. Effect – Noncompliance with the procurement requirements could result in the District expending federal funds inappropriately or not obtaining competitively prices goods or services, which could be viewed as a violation of the award agreement. Recommendation – We recommend the District review its internal control procedures for its special education cluster federal programs to ensure that controls in place over compliance with federal procurement requirements are being consistently applied, including awarding contracts based on multiple quotations for the purchase of goods or services in excess of the District’s micro-purchase threshold of $10,000, as required by the Uniform Guidance. View of Responsible Official and Planned Corrective Actions – There is no disagreement with the audit finding. District management will review its procedures relating to procurement for its federal programs to ensure that multiple quotations are obtained when required and that adequate documentation is retained. The District has separately issued a Corrective Action Plan related to this finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORETABLE INSTANCES OF NONCOMPLIANCE– U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER – FEDERAL ALN 84.027 AND 84.173 2024-002 Internal Control Over Compliance and Reportable Noncompliance With Federal Procurement Requirements Criteria – 2CFR § 200.320 requires the District to establish and maintain effective internal control over compliance with procurement requirements applicable to expenditures within its special education cluster federal programs. Condition – Our testing indicated that the District did not have sufficient controls in place within its special education cluster federal programs to ensure compliance with federal procurement requirements related to methods of procurement, which resulted in reportable instances of noncompliance. Questioned Costs – $92,850. Context – For two of six vendors tested, the District did not obtain two or more quotations for contracts awarded in excess of its stated micro-purchase threshold of $10,000 within its special education cluster federal programs, as required by the Uniform Guidance. All contracts required to be awarded based on multiple quotations within the District’s special education cluster federal programs were tested. Repeat Finding – This is a current year finding. Cause – The District’s internal control procedures over procurement requirements applicable to its special education cluster federal programs were not being consistently followed. Effect – Noncompliance with the procurement requirements could result in the District expending federal funds inappropriately or not obtaining competitively prices goods or services, which could be viewed as a violation of the award agreement. Recommendation – We recommend the District review its internal control procedures for its special education cluster federal programs to ensure that controls in place over compliance with federal procurement requirements are being consistently applied, including awarding contracts based on multiple quotations for the purchase of goods or services in excess of the District’s micro-purchase threshold of $10,000, as required by the Uniform Guidance. View of Responsible Official and Planned Corrective Actions – There is no disagreement with the audit finding. District management will review its procedures relating to procurement for its federal programs to ensure that multiple quotations are obtained when required and that adequate documentation is retained. The District has separately issued a Corrective Action Plan related to this finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORETABLE INSTANCES OF NONCOMPLIANCE– U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER – FEDERAL ALN 84.027 AND 84.173 2024-002 Internal Control Over Compliance and Reportable Noncompliance With Federal Procurement Requirements Criteria – 2CFR § 200.320 requires the District to establish and maintain effective internal control over compliance with procurement requirements applicable to expenditures within its special education cluster federal programs. Condition – Our testing indicated that the District did not have sufficient controls in place within its special education cluster federal programs to ensure compliance with federal procurement requirements related to methods of procurement, which resulted in reportable instances of noncompliance. Questioned Costs – $92,850. Context – For two of six vendors tested, the District did not obtain two or more quotations for contracts awarded in excess of its stated micro-purchase threshold of $10,000 within its special education cluster federal programs, as required by the Uniform Guidance. All contracts required to be awarded based on multiple quotations within the District’s special education cluster federal programs were tested. Repeat Finding – This is a current year finding. Cause – The District’s internal control procedures over procurement requirements applicable to its special education cluster federal programs were not being consistently followed. Effect – Noncompliance with the procurement requirements could result in the District expending federal funds inappropriately or not obtaining competitively prices goods or services, which could be viewed as a violation of the award agreement. Recommendation – We recommend the District review its internal control procedures for its special education cluster federal programs to ensure that controls in place over compliance with federal procurement requirements are being consistently applied, including awarding contracts based on multiple quotations for the purchase of goods or services in excess of the District’s micro-purchase threshold of $10,000, as required by the Uniform Guidance. View of Responsible Official and Planned Corrective Actions – There is no disagreement with the audit finding. District management will review its procedures relating to procurement for its federal programs to ensure that multiple quotations are obtained when required and that adequate documentation is retained. The District has separately issued a Corrective Action Plan related to this finding.
2024 – 002 Procurement Federal Agency: U.S. Department of Agriculture Federal Program Names: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, & 10.559 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2024-402303-DPI-SB-SEVERE-546, 2024-402303-DPI-NSL-547, 2024- 402303-DPI-SFSP-561 Award Periods: 7/1/23-6/30/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance 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). Condition: During our testing of procurement transactions of the program we noted that none of the vendors selected were supported by an adequate number of price or rate quotations to ensure the District is prudent with the monies used towards the program. Context: The District did not obtain an appropriate number of price or rate quotations for 2 of the 2 vendors tested in our sample. Cause: The District did not follow Federal Funds Procurement policy. Effect: Obtaining price or rate quotations from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price or rate quotations may cause the District to over pay for supplies or services. Questioned Costs: None Repeat Finding: Not a repeat Finding Recommendation: We recommend the District review procurement policies and establish a procurement process in order to ensure this policy is being followed. Views of Responsible Officials: There is no disagreement with this finding and management has developed a plan to correct the finding.
2024 – 002 Procurement Federal Agency: U.S. Department of Agriculture Federal Program Names: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, & 10.559 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2024-402303-DPI-SB-SEVERE-546, 2024-402303-DPI-NSL-547, 2024- 402303-DPI-SFSP-561 Award Periods: 7/1/23-6/30/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance 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). Condition: During our testing of procurement transactions of the program we noted that none of the vendors selected were supported by an adequate number of price or rate quotations to ensure the District is prudent with the monies used towards the program. Context: The District did not obtain an appropriate number of price or rate quotations for 2 of the 2 vendors tested in our sample. Cause: The District did not follow Federal Funds Procurement policy. Effect: Obtaining price or rate quotations from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price or rate quotations may cause the District to over pay for supplies or services. Questioned Costs: None Repeat Finding: Not a repeat Finding Recommendation: We recommend the District review procurement policies and establish a procurement process in order to ensure this policy is being followed. Views of Responsible Officials: There is no disagreement with this finding and management has developed a plan to correct the finding.
2024 – 002 Procurement Federal Agency: U.S. Department of Agriculture Federal Program Names: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, & 10.559 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2024-402303-DPI-SB-SEVERE-546, 2024-402303-DPI-NSL-547, 2024- 402303-DPI-SFSP-561 Award Periods: 7/1/23-6/30/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance 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). Condition: During our testing of procurement transactions of the program we noted that none of the vendors selected were supported by an adequate number of price or rate quotations to ensure the District is prudent with the monies used towards the program. Context: The District did not obtain an appropriate number of price or rate quotations for 2 of the 2 vendors tested in our sample. Cause: The District did not follow Federal Funds Procurement policy. Effect: Obtaining price or rate quotations from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price or rate quotations may cause the District to over pay for supplies or services. Questioned Costs: None Repeat Finding: Not a repeat Finding Recommendation: We recommend the District review procurement policies and establish a procurement process in order to ensure this policy is being followed. Views of Responsible Officials: There is no disagreement with this finding and management has developed a plan to correct the finding.
2024 – 002 Procurement Federal Agency: U.S. Department of Agriculture Federal Program Names: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, & 10.559 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2024-402303-DPI-SB-SEVERE-546, 2024-402303-DPI-NSL-547, 2024- 402303-DPI-SFSP-561 Award Periods: 7/1/23-6/30/24 Type of Finding: Significant Deficiency in Internal Control Over Compliance 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). Condition: During our testing of procurement transactions of the program we noted that none of the vendors selected were supported by an adequate number of price or rate quotations to ensure the District is prudent with the monies used towards the program. Context: The District did not obtain an appropriate number of price or rate quotations for 2 of the 2 vendors tested in our sample. Cause: The District did not follow Federal Funds Procurement policy. Effect: Obtaining price or rate quotations from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price or rate quotations may cause the District to over pay for supplies or services. Questioned Costs: None Repeat Finding: Not a repeat Finding Recommendation: We recommend the District review procurement policies and establish a procurement process in order to ensure this policy is being followed. Views of Responsible Officials: There is no disagreement with this finding and management has developed a plan to correct the finding.
Federal Agency: United States Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: Various Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-SDE64370-20977 Award Period: July 1, 2023 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City of Norwich did not have adequate internal controls designed to ensure noncompetitive procurement methods are in accordance with 2 CFR section 200.320. Questioned costs: None noted Context: It was noted that while the City was justified in utilizing vendors that were procured under a non-competitive method, there was no documentation for 2 of the 2 vendors tested of the single source justification prior to entering awarding a contract to the vendors. Cause: The City of Norwich did not retain single source justification documentation. Effect: There were no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend the City of Norwich design controls to ensure documentation for single source justifications are in place in accordance with 2 CFR section 200.320. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: United States Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: Various Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-SDE64370-20977 Award Period: July 1, 2023 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City of Norwich did not have adequate internal controls designed to ensure noncompetitive procurement methods are in accordance with 2 CFR section 200.320. Questioned costs: None noted Context: It was noted that while the City was justified in utilizing vendors that were procured under a non-competitive method, there was no documentation for 2 of the 2 vendors tested of the single source justification prior to entering awarding a contract to the vendors. Cause: The City of Norwich did not retain single source justification documentation. Effect: There were no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend the City of Norwich design controls to ensure documentation for single source justifications are in place in accordance with 2 CFR section 200.320. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: United States Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: Various Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-SDE64370-20977 Award Period: July 1, 2023 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City of Norwich did not have adequate internal controls designed to ensure noncompetitive procurement methods are in accordance with 2 CFR section 200.320. Questioned costs: None noted Context: It was noted that while the City was justified in utilizing vendors that were procured under a non-competitive method, there was no documentation for 2 of the 2 vendors tested of the single source justification prior to entering awarding a contract to the vendors. Cause: The City of Norwich did not retain single source justification documentation. Effect: There were no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend the City of Norwich design controls to ensure documentation for single source justifications are in place in accordance with 2 CFR section 200.320. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: United States Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027/84.173 Federal Award Identification Number and Year: Various Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number(s): 12060-SDE64370-20977 Award Period: July 1, 2023 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The City of Norwich did not have adequate internal controls designed to ensure noncompetitive procurement methods are in accordance with 2 CFR section 200.320. Questioned costs: None noted Context: It was noted that while the City was justified in utilizing vendors that were procured under a non-competitive method, there was no documentation for 2 of the 2 vendors tested of the single source justification prior to entering awarding a contract to the vendors. Cause: The City of Norwich did not retain single source justification documentation. Effect: There were no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No Recommendation: We recommend the City of Norwich design controls to ensure documentation for single source justifications are in place in accordance with 2 CFR section 200.320. Views of responsible officials: There is no disagreement with the audit finding.
2024-002 - Procurement, Suspension and Debarment. Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance. Federal Program(s) U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027). Criteria. A recipient of federal awards is required to determine that vendors being paid with federal funds are not suspended or debarred from doing business with the government. Such procedures are required whenever the amount disbursed to a single vendor in a given fiscal year is expected to be at least $25,000. Also, recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. In cases where the vendor did not sign a suspension or debarment certification, either within the vendor contract or as a separate certification, the City did not have a process in place to manually search the Excluded Parties List System to verify the vendor was not suspended or debarred. Cause. This condition is the result of lack of management oversight. Effect. As a result of this condition, while none of the vendors tested appeared to be suspended or debarred, documentation does not exist to support that the City verified its vendors paid with federal dollars were not suspended or debarred prior to contracting with them. Questioned Costs. No costs were questioned as a result of this finding. Recommendation. We recommend that the City create procedures and a related checklist to ensure all federal requirements are being addressed. View of Responsible Official. Due to the influx of new employees managing federal funds under the Coronavirus State and Local Fiscal Recovery Funds program, many were unaware of the requirement to document their searches for suspended or debarred vendors. As a result, search results showing no matches were not retained in the files. Moving forward, all relevant employees will receive additional training to ensure proper documentation of these searches. This training will help to ensure this requirement is consistently met in the future. Responsible Official. Finance Director. Estimated Completion Date. June 30, 2025.
2024-002 - Procurement, Suspension and Debarment. Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Control over Compliance. Federal Program(s) U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027). Criteria. A recipient of federal awards is required to determine that vendors being paid with federal funds are not suspended or debarred from doing business with the government. Such procedures are required whenever the amount disbursed to a single vendor in a given fiscal year is expected to be at least $25,000. Also, recipients of federal awards are required to ensure that federal procurement standards are followed for any purchases over the federal micropurchase threshold. 2 CFR 200.320 requires that these purchases must adhere to one of the allowable procurement methods (sealed bids, competitive proposals, noncompetitive procurement) and maintain documentation of this procurement decision. Condition. In cases where the vendor did not sign a suspension or debarment certification, either within the vendor contract or as a separate certification, the City did not have a process in place to manually search the Excluded Parties List System to verify the vendor was not suspended or debarred. Cause. This condition is the result of lack of management oversight. Effect. As a result of this condition, while none of the vendors tested appeared to be suspended or debarred, documentation does not exist to support that the City verified its vendors paid with federal dollars were not suspended or debarred prior to contracting with them. Questioned Costs. No costs were questioned as a result of this finding. Recommendation. We recommend that the City create procedures and a related checklist to ensure all federal requirements are being addressed. View of Responsible Official. Due to the influx of new employees managing federal funds under the Coronavirus State and Local Fiscal Recovery Funds program, many were unaware of the requirement to document their searches for suspended or debarred vendors. As a result, search results showing no matches were not retained in the files. Moving forward, all relevant employees will receive additional training to ensure proper documentation of these searches. This training will help to ensure this requirement is consistently met in the future. Responsible Official. Finance Director. Estimated Completion Date. June 30, 2025.
Criteria: Under 2 CFR 200.320(c) vendors above a micro-purchase threshold require a competitive process that includes soliciting multiple bids/quotes to justify best value. The Uniform Guidance requires purchasing decisions to be documented, including sole source justification, as applicable. Condition: For two out of five procurement selections totaling $158,000, evidence of the procurement process (signed competitive bid or sole source documentation and the related approvals), was not retained in the procurement file. As such, we were unable to obtain the required documentation to support vendor selection and price justification. Cause: The buyers executing these transactions did not obtain and maintain the required documentation evidencing that these transactions were conducted in accordance with federal requirements. Effect: Failure to obtain and maintain complete procurement files may lead to non-compliance with required regulations. Questioned Costs: There are no questioned costs associated with this finding as procurements were made for allowable transactions. Recommendation: We recommend Management enhance their existing policies and procedures to ensure documentation is retained to justify the rationale for purchasing decisions consistent with the Uniform Guidance. This could include additional training in this area and providing readily available guidance as to what documentation is required prior to executing federal purchasing transactions. Additionally, we recommend that Management retroactively document vendor and price rationale for the two selections and retain this documentation within the procurement file.
Criteria: Under 2 CFR 200.320(c) vendors above a micro-purchase threshold require a competitive process that includes soliciting multiple bids/quotes to justify best value. The Uniform Guidance requires purchasing decisions to be documented, including sole source justification, as applicable. Condition: For two out of five procurement selections totaling $158,000, evidence of the procurement process (signed competitive bid or sole source documentation and the related approvals), was not retained in the procurement file. As such, we were unable to obtain the required documentation to support vendor selection and price justification. Cause: The buyers executing these transactions did not obtain and maintain the required documentation evidencing that these transactions were conducted in accordance with federal requirements. Effect: Failure to obtain and maintain complete procurement files may lead to non-compliance with required regulations. Questioned Costs: There are no questioned costs associated with this finding as procurements were made for allowable transactions. Recommendation: We recommend Management enhance their existing policies and procedures to ensure documentation is retained to justify the rationale for purchasing decisions consistent with the Uniform Guidance. This could include additional training in this area and providing readily available guidance as to what documentation is required prior to executing federal purchasing transactions. Additionally, we recommend that Management retroactively document vendor and price rationale for the two selections and retain this documentation within the procurement file.
2024-005 Suspension and Debarment Federal Agency: Environmental Protection Agency Federal Program Name: Drinking Water State Revolving Fund Federal Assistance Listing Number: 66.468 Federal Award Identification Number and Year: Unknown Award Period: March 03, 2021 – December 31, 2026 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that 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. Condition: The City did not check suspension and debarment status was verified prior to entering into contract with vendors. Questioned Costs: None noted Context: While performing compliance procedures, it was noted that the City did not check vendors for suspension and debarment. Cause: The City does not have controls related to ensuring suspension and debarment are verified prior to entering into contract with vendors. Effect: The City may contract with a vendor that has been suspended or debarred from receiving federal funds. Repeat Finding: No Recommendation: We recommend the City continue the process in assessing its financial management systems and related internal controls over federal awards during the 2025 fiscal year. This assessment should include evaluating existing policies and procedures to determine where additional enhancements should be made or new policies created, a plan to communicate these policies to City employees, and procedures to periodically review and update, as considered necessary. View of Responsible Officials There is no disagreement with the audit finding.
Assistance Listing Number/Federal Program/Granting Agency:AL # 21.027. Coronavirus State and Local Fiscal Recovery Funds, American Rescue Plan Act (ARPA) Criteria: Recipients are required to follow procurement procedures as required in the Uniform Guidance, 2 CFR 200.320. Statement of Condition: The Housing Authority did not follow sealed bid method in accordance with the procurement standards 2 CFR 200.320 of the Uniform Guidance. Questioned Costs: None. Cause: The Housing Authority executed a contract with the General Contractor and did not follow sealed bid method for procurement in accordance with the Uniform Guidance. Effect or Possible Effect and Perspective: The Housing Authority did not comply with the procurement requirement set forth in the Uniform Guidance, 2 CFR 200.320. Repeat Finding: Repeat finding. Recommendation: The Housing Authority should designate a person in the development department to verify which procurement method should be used. Views of Responsible Officials: Agree.
Finding 2024-001 Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Procurement standards contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance) , Subpart D ‐ Post Federal Award Requirements, Section 200.320 through 200.321 require that procurements of goods and services charges to Federal awards be conducted to provide full and open competition including the meeting of criteria for the use of the noncompetitive procurement method. Condition/Context During our testing of 1 of 2 material procurement transactions, we identified the Organization lacked written justification for the use of the noncompetitive procurement method as required by 2 CFR Part 200.320(c). Section II - Federal Award Findings and Questioned Costs (Continued) Finding 2024-001 Cause The Organization's internal controls over procurement were not sufficient to ensure that appropriate justification be determined and documented when the noncompetitive procurement method is used. Effect The Organization did not comply the procurement standards set out at 2 CFR Part 200 as it related to the selected procurement transaction. Questioned Costs None Repeat Finding No. Recommendation Subsequent to June 30, 2024, we noted the Organization requested and received explicit approval from the United States Department of State to use the noncompetitive procurement method for the procurement transaction tested. We recommend the Organization implement measures to ensure that proper justification be determined and documented when utilizing the noncompetitive procurement method. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Department of Health and Human Services Federal Financial Assistance Listing 93.591, 2201SDSDVC, 2301SDSDVC, 2101SDSDC6, 2201SDSTC6 Family Violence Prevention and Services/State Domestic Violence Coalitions Procurement, Suspension, & Debarment Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must create and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR 200.320 notes for any of the procurement methods described in the section, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of the section. Condition: There were two instances where the review and approval process did not identify the correct procurement method on the procurement worksheet. The correct method was used, however was not properly documented on the Organization's internal worksheet. In addition, the contracts tested did not include some of the required provisions. Cause: The Organization’s review process did not identify the errors. Effect: Without following the established procurement procedures, it is difficult to demonstrate compliance with the federal requirements. Questioned Costs: None reported Context/Sampling: There were two contracts entered into during the current year and both were tested. Repeat Finding from Prior Year(s): No Recommendation: We recommend that management review the procurement procedures with applicable employees to ensure procedures are followed going forward. In addition, we suggest management review the contract process to ensure that contracts contain all required contract provisions. Views of Responsible Officials: Management is in agreement.
Department of Health and Human Services Federal Financial Assistance Listing 93.591, 2201SDSDVC, 2301SDSDVC, 2101SDSDC6, 2201SDSTC6 Family Violence Prevention and Services/State Domestic Violence Coalitions Procurement, Suspension, & Debarment Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must create and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR 200.320 notes for any of the procurement methods described in the section, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of the section. Condition: There were two instances where the review and approval process did not identify the correct procurement method on the procurement worksheet. The correct method was used, however was not properly documented on the Organization's internal worksheet. In addition, the contracts tested did not include some of the required provisions. Cause: The Organization’s review process did not identify the errors. Effect: Without following the established procurement procedures, it is difficult to demonstrate compliance with the federal requirements. Questioned Costs: None reported Context/Sampling: There were two contracts entered into during the current year and both were tested. Repeat Finding from Prior Year(s): No Recommendation: We recommend that management review the procurement procedures with applicable employees to ensure procedures are followed going forward. In addition, we suggest management review the contract process to ensure that contracts contain all required contract provisions. Views of Responsible Officials: Management is in agreement.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). Condition: During our testing of procurement, we sampled one contract that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Expenditures for the vendor totaled $53,132. The District has a $50,000 threshold. Additionally, we sampled three contracts that exceed the simplified acquisition threshold and require competitive bidding or the noncompetitive proposals method of procurement. The District could not provide evidence of proper procurement procedure for either method in one of three instances for $751,360. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in two of four vendors tested. Questioned Cost: $804,492 in awarded contracts. Effect: This resulted in roughly $804,492 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: The Hollandia Dairy bid in question was originally for the 2020-2021 school year, and the audit inquiry was related to the 2023-2024 school year. Upon reviewing the bid, we realized that a new bid should have been issued for the 2023-2024 school year. This oversight was unintentional. However, we did conduct a bid for Hollandia Dairy this year (2024-2025), but unfortunately, no other bidders responded to our solicitation. To prevent similar issues from occurring in the future, we will implement a dedicated district system to track all formal bids, informal bids, and RFQs by contract year. This will be done through a combination of individual files and a shared Google document within the Nutrition Drive. This process will help us maintain proper documentation and ensure compliance with procurement requirements moving forward. The live Google document will include key information such as bid solicitation dates, contract dates, and renewal dates for all Nutrition Services bids, RFPs, RFQs, and micro-purchases. Additionally, the Nutrition Services Director will review all contracts at the beginning of each school year before issuing a purchase order to verify that we are in compliance with federal procurement procedures.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). Condition: During our testing of procurement, we sampled one contract that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Expenditures for the vendor totaled $53,132. The District has a $50,000 threshold. Additionally, we sampled three contracts that exceed the simplified acquisition threshold and require competitive bidding or the noncompetitive proposals method of procurement. The District could not provide evidence of proper procurement procedure for either method in one of three instances for $751,360. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in two of four vendors tested. Questioned Cost: $804,492 in awarded contracts. Effect: This resulted in roughly $804,492 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: The Hollandia Dairy bid in question was originally for the 2020-2021 school year, and the audit inquiry was related to the 2023-2024 school year. Upon reviewing the bid, we realized that a new bid should have been issued for the 2023-2024 school year. This oversight was unintentional. However, we did conduct a bid for Hollandia Dairy this year (2024-2025), but unfortunately, no other bidders responded to our solicitation. To prevent similar issues from occurring in the future, we will implement a dedicated district system to track all formal bids, informal bids, and RFQs by contract year. This will be done through a combination of individual files and a shared Google document within the Nutrition Drive. This process will help us maintain proper documentation and ensure compliance with procurement requirements moving forward. The live Google document will include key information such as bid solicitation dates, contract dates, and renewal dates for all Nutrition Services bids, RFPs, RFQs, and micro-purchases. Additionally, the Nutrition Services Director will review all contracts at the beginning of each school year before issuing a purchase order to verify that we are in compliance with federal procurement procedures.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). Condition: During our testing of procurement, we sampled one contract that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Expenditures for the vendor totaled $53,132. The District has a $50,000 threshold. Additionally, we sampled three contracts that exceed the simplified acquisition threshold and require competitive bidding or the noncompetitive proposals method of procurement. The District could not provide evidence of proper procurement procedure for either method in one of three instances for $751,360. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in two of four vendors tested. Questioned Cost: $804,492 in awarded contracts. Effect: This resulted in roughly $804,492 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: The Hollandia Dairy bid in question was originally for the 2020-2021 school year, and the audit inquiry was related to the 2023-2024 school year. Upon reviewing the bid, we realized that a new bid should have been issued for the 2023-2024 school year. This oversight was unintentional. However, we did conduct a bid for Hollandia Dairy this year (2024-2025), but unfortunately, no other bidders responded to our solicitation. To prevent similar issues from occurring in the future, we will implement a dedicated district system to track all formal bids, informal bids, and RFQs by contract year. This will be done through a combination of individual files and a shared Google document within the Nutrition Drive. This process will help us maintain proper documentation and ensure compliance with procurement requirements moving forward. The live Google document will include key information such as bid solicitation dates, contract dates, and renewal dates for all Nutrition Services bids, RFPs, RFQs, and micro-purchases. Additionally, the Nutrition Services Director will review all contracts at the beginning of each school year before issuing a purchase order to verify that we are in compliance with federal procurement procedures.
Finding 2024-001: Procurement (50000) Assistance Listing # 10.553, 10.555 – U.S. Department of Agriculture, California Department of Education, Child Nutrition Cluster Repeat Finding? No Criteria: Code of Federal Regulations, CFR 200.320, require the non-Federal entity to have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for the acquisition of property or services required under a Federal award or sub-award. For “small purchases,” those where the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). Condition: During our testing of procurement, we sampled one contract that would qualify as “small purchases.” The district could not provide evidence that multiple quotes had been obtain prior to selecting one of the vendors. Expenditures for the vendor totaled $53,132. The District has a $50,000 threshold. Additionally, we sampled three contracts that exceed the simplified acquisition threshold and require competitive bidding or the noncompetitive proposals method of procurement. The District could not provide evidence of proper procurement procedure for either method in one of three instances for $751,360. Cause: Due to turnover at the District, there has been a lack of oversight to ensure all appropriate documentation is maintained to demonstrate that the District is in compliance with the Code of Federal Regulations and that purchases are awarded after a reasonable number of quotes have been obtained. Context: Deficiency was noted in two of four vendors tested. Questioned Cost: $804,492 in awarded contracts. Effect: This resulted in roughly $804,492 dollars awarded in contracts, without following proper procedures. Recommendation: We recommend that the District train and implement the required federal procurement procedures to ensure that the District is in compliance. Views of Responsible Officials: The Hollandia Dairy bid in question was originally for the 2020-2021 school year, and the audit inquiry was related to the 2023-2024 school year. Upon reviewing the bid, we realized that a new bid should have been issued for the 2023-2024 school year. This oversight was unintentional. However, we did conduct a bid for Hollandia Dairy this year (2024-2025), but unfortunately, no other bidders responded to our solicitation. To prevent similar issues from occurring in the future, we will implement a dedicated district system to track all formal bids, informal bids, and RFQs by contract year. This will be done through a combination of individual files and a shared Google document within the Nutrition Drive. This process will help us maintain proper documentation and ensure compliance with procurement requirements moving forward. The live Google document will include key information such as bid solicitation dates, contract dates, and renewal dates for all Nutrition Services bids, RFPs, RFQs, and micro-purchases. Additionally, the Nutrition Services Director will review all contracts at the beginning of each school year before issuing a purchase order to verify that we are in compliance with federal procurement procedures.
Assistance Listing, Federal Agency, and Program Name - 21.027 - COVID - 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - SLFRP0126 Pass through Entity - U.S. Department of Treasury Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - 2 CFR 200.320 and 200.324 outlines the auditee responsibility to utilize the appropriate procurement method and comply with all related requirements of that selected procurement methodology. Also, 2 CFR 180.300 outlines the auditee responsibility related to suspension and debarment requirements for vendors with whom an entity contracts. Condition - The School District did not have sufficient controls in place to ensure compliance with its procurement policy and that appropriate documentation is retained regarding the procurement methodology chosen and support for compliance with the suspension and debarment requirements. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Of the sample of 2 contracts procured this year that we selected for testing, 2 did not have the required support for the procurement method selected based on federal guidelines and the School District's procurement policy. Additionally, the 2 contracts selected for suspension and debarment testing did not have any documentation as it related to suspension and debarment. Cause and Effect - The School District did not retain support to show it obtained price quotes, as required by the small purchases provision; had the appropriate rationale, as required by the noncompetitive solicitation provision; or had support for proposals submitted, as required by the purchases over $250,000 provision. Support was not retained for 2 of the 2 samples selected during procurement testing; therefore, procurement methodology was not supported. Additionally, none of the 2 samples selected for suspension and debarment testing had the required support retained. Recommendation - We recommend the School District implement internal control procedures to ensure that procurement policy is followed and the proper documentation is kept in the procurement files to support any and all procurement decisions in accordance with the purchasing policy and federal regulations. Views of Responsible Officials and Planned Corrective Actions - This finding was due to the District having turnover among key personnel in the grants area, as well as non adherence to policies and procedures related to grant records, grant accounting, and year end close processes. The District will work with the Materials and Procurement department to ensure policies and procedures are updated and staff is trained. Prior to awarding any contract, District staff will search the federal Excluded Parties List System to determine that the contractor is not suspended or debarred. Documentation of this search will be maintained in the grant procurement file.
Finding 2024-001 Material Weakness, Compliance and Internal Control Over Procurement, Suspension and Debarment Compliance CFDA 93.676 - Unaccompanied Children Program Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Global Refuge and Lutheran Immigration and Refugee Services Criteria Or Specific Requirement: The organization must adhere to the procurement methods outlined in 2 CFR 200.320, using informal procedures for small purchases, formal methods (sealed bids or proposals) for larger ones, or noncompetitive methods as appropriate. The organization is responsible for establishing processes and procedures for each method and maintaining relevant documentation. Additionally, as per 2 CFR 200.213, the organization must not contract with suspended or debarred parties. Before entering into a covered transaction, the organization must verify the eligibility of the potential contractor. Condition: The Organization has not ensured compliance with appropriate procurement methods, retention of necessary documents and decisions, or pre-contractual review for suspension and debarment requirements. Cause: The Organization lacks sufficient policies and controls to ensure compliance with Federal procurement, suspension, and debarment regulations. Effect: The Organization's failure to fully comply with procurement, suspension and debarment requirements could have led to contracts with suspended or debarred parties or contracts awarded through improper methods. Questioned Costs: Not applicable Context: Three of the five contracts reviewed lacked sufficient documentation to support the procurement methodology used. While no payments were made to debarred parties, the absence of a policy or procedure to prevent such occurrences poses a significant risk. Identification As A Repeat Finding: N/A Recommendation: We recommend that Organization implement internal policies to identify appropriate procurement methodologies, conduct regular suspension and debarment checks, maintain adequate file documentation to ensure compliance with procurement and suspension/debarment regulations and prevent contracts with ineligible parties. Views Of Responsible Officials And Planned Corrective Action: The Organization agrees with the finding and has put together a corrective action plan for the finding. See corrective action plan included in this report.
Finding 2024-001 Material Weakness, Compliance and Internal Control Over Procurement, Suspension and Debarment Compliance CFDA 93.676 - Unaccompanied Children Program Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Global Refuge and Lutheran Immigration and Refugee Services Criteria Or Specific Requirement: The organization must adhere to the procurement methods outlined in 2 CFR 200.320, using informal procedures for small purchases, formal methods (sealed bids or proposals) for larger ones, or noncompetitive methods as appropriate. The organization is responsible for establishing processes and procedures for each method and maintaining relevant documentation. Additionally, as per 2 CFR 200.213, the organization must not contract with suspended or debarred parties. Before entering into a covered transaction, the organization must verify the eligibility of the potential contractor. Condition: The Organization has not ensured compliance with appropriate procurement methods, retention of necessary documents and decisions, or pre-contractual review for suspension and debarment requirements. Cause: The Organization lacks sufficient policies and controls to ensure compliance with Federal procurement, suspension, and debarment regulations. Effect: The Organization's failure to fully comply with procurement, suspension and debarment requirements could have led to contracts with suspended or debarred parties or contracts awarded through improper methods. Questioned Costs: Not applicable Context: Three of the five contracts reviewed lacked sufficient documentation to support the procurement methodology used. While no payments were made to debarred parties, the absence of a policy or procedure to prevent such occurrences poses a significant risk. Identification As A Repeat Finding: N/A Recommendation: We recommend that Organization implement internal policies to identify appropriate procurement methodologies, conduct regular suspension and debarment checks, maintain adequate file documentation to ensure compliance with procurement and suspension/debarment regulations and prevent contracts with ineligible parties. Views Of Responsible Officials And Planned Corrective Action: The Organization agrees with the finding and has put together a corrective action plan for the finding. See corrective action plan included in this report.
Finding 2024-001 Material Weakness, Compliance and Internal Control Over Procurement, Suspension and Debarment Compliance CFDA 93.676 - Unaccompanied Children Program Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Global Refuge and Lutheran Immigration and Refugee Services Criteria Or Specific Requirement: The organization must adhere to the procurement methods outlined in 2 CFR 200.320, using informal procedures for small purchases, formal methods (sealed bids or proposals) for larger ones, or noncompetitive methods as appropriate. The organization is responsible for establishing processes and procedures for each method and maintaining relevant documentation. Additionally, as per 2 CFR 200.213, the organization must not contract with suspended or debarred parties. Before entering into a covered transaction, the organization must verify the eligibility of the potential contractor. Condition: The Organization has not ensured compliance with appropriate procurement methods, retention of necessary documents and decisions, or pre-contractual review for suspension and debarment requirements. Cause: The Organization lacks sufficient policies and controls to ensure compliance with Federal procurement, suspension, and debarment regulations. Effect: The Organization's failure to fully comply with procurement, suspension and debarment requirements could have led to contracts with suspended or debarred parties or contracts awarded through improper methods. Questioned Costs: Not applicable Context: Three of the five contracts reviewed lacked sufficient documentation to support the procurement methodology used. While no payments were made to debarred parties, the absence of a policy or procedure to prevent such occurrences poses a significant risk. Identification As A Repeat Finding: N/A Recommendation: We recommend that Organization implement internal policies to identify appropriate procurement methodologies, conduct regular suspension and debarment checks, maintain adequate file documentation to ensure compliance with procurement and suspension/debarment regulations and prevent contracts with ineligible parties. Views Of Responsible Officials And Planned Corrective Action: The Organization agrees with the finding and has put together a corrective action plan for the finding. See corrective action plan included in this report.