Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.
Condition: The Land Bank has not adopted a written procurement policy. The Land Bank did not retain supporting documentation for procurements entered during the year ended December 31, 2023. Context: The Land Bank represented contractors were evaluated by analyzing City of Wilmington permit information. The Land Bank did not retain documentation of this analysis to support its procurement actions. Criteria: CFR § 200.318, General Procurement Standards and § 200.320 Methods of Procurement to be Followed, of the Uniform Guidance apply to the State and Local Fiscal Recovery Funds Program and require the following: i. The Land Bank must adopt documented procurement procedures that are consistent with the applicable State, local and federal regulations. ii. The Land Bank’s documented procurement procedures must include the following elements at a minimum: a. Micro-purposes - purchases up to $50,000 may be made without soliciting competitive price or rate quotations if the price is considered reasonable. b. Small Purchases - purchases between $50,000 and $250,000 may be made with soliciting competitive price or rate quotations from an adequate number of qualified sources. c. Formal Procedures - purchases over $250,000 must be made by sealed bid or competitive proposal. Cause: The Land Bank does not have a written procurement policy. Questioned Costs: None Effect: The Land Bank did comply with the Uniform Guidance requirement to adopt a procurement policy and did not fully document its procurement actions. Recommendation: We recommend Land Bank establish a procurement policy and prepare documentation for each procurement action.
Finding 2023-006: Procurement Information on the Federal Program: 97.024 - Emergency Food and Shelter National Board Program Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: According to 2 CFR §200.303, 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). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold, 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that SAMU did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that while SAMU does have a procurement policy in place, the policy does not include requirements for re-procuring long-term contracts that continuously re-new. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as SAMU's internal procurement policy. Questioned Costs: $75,000 Context: 2 of 4 samples selected for testing did not have adequate documentation for the rationale related to the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The sample is representative of the population. Identification as a Repeat Finding, if Applicable: 2022-006 Recommendation: We recommend SAMU retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.
Finding 2023–001 Department of Treasury Federal Assistance Listing No. 21.027 Coronavirus State and Local Fiscal Recovery Funds Significant Deficiency and Noncompliance over Procurement and Suspension and Debarment Repeat Finding: Yes Condition: During our testing and review of the Organization’s procurement policy, we were unable to obtain documentation to support the Organization’s basis for sole source contracts. Additionally, documentation was not available to support the inquiries around suspension and disbarment. Criteria: The Uniform Guidance and 45 CF Part 75 require that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The characteristics of internal controls are presented in the context of the components of internal controls discussed in the Internal Control-Integrated Framework (COSO Report), published by the Committee of Sponsoring Organizations of the Treadway Commission. The COSO Report provides a framework for organizations to design, implement, and evaluate controls that will facilitate compliance with the requirements of federal laws, regulations, and program compliance requirements. Per 2 CFR 200.320 General procurement stands: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; (2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Per 2 CFR 200.318 General procurement stands: (b) 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. Per Uniform Guidance, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov Home (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Cause: The Organization did not apply the required procurement policy relative to sole source contracts in accordance with Uniform Guidance. Management also did not complete a review of vendors/contractors to verify they are not suspended, debarred, or otherwise excluded before contracting. Effect: The Organization does not have adequate documentation to support its sole source procurement and is not in compliance with federal guidelines. Questioned Costs: Unknown Recommendation: We recommend the Organization update and follow their controls to identify vendors that should go through the procurement process. We also recommend the Organization follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document those procedures. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan.
Finding: 2023-001 Program Title: Congressionally Funded Community Projects Assistance Listing: 84.215K Contract Grant Number: S215K230172 Federal Award Years: July 1, 2023 to May 31, 2025 Federal Agency: U.S. Department of Education Type of Finding: Material Noncompliance Criteria: 2 CFR sections 200.318 through 200.326 establishes the procurement standards applicable to Non- Federal Entities applicable to federal awards. When acquisitions exceed the simplified acquisition threshold of $250,000, the non-federal entity must use one of the following procurement methods: the sealed bid method, the competitive proposals method, or the noncompetitive proposals method based on the criteria outlined in 2 CFR section 200.320. Condition: Based on procedures performed, SC&C identified acquisitions in excess of the simplified acquisition threshold that were not selected using an appropriate procurement method. Cause: The Organization was unaware of the compliance requirement. Also, the Organization did not follow its written procurement policy. Effect: $324,000 of costs are questioned costs as a result of failing to meet procurement requirements. This is considered material to the Congressionally Funded Community Projects. Repeat Finding: No Recommendation: We recommend the Organization establish and implement written policies and procedures to establish to ensure compliance with the compliance requirements and terms and conditions of the federal award. Views of Responsible Officials: Management agrees with the recommendations to establish and implement written policies and procedures to conform with the compliance requirements and terms and conditions of the federal award.
Information on Federal Programs: 93.083 – Centers for Disease Control and Prevention: Prevention of Disease, Disability, and Death through Immunization & Control of Respiratory & Related Diseases. Criteria or Specific Requirements: According to 2 CFR §200.303, the non-Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 COSO. Additionally, according to 2 CFR §200.320, the non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §200.318 and §200.319. Condition: During the testing of the procurement compliance requirement related to the major programs, it was determined that ATS did not have a documented procurement policy in place for procurement of property or services required under a Federal award. Cause: Management did not have internal control procedures in place to ensure that procurement requirements were adequately followed, documented and retained when Federal awards were obtained. Effect: Failure to have and use documented procurement policies and procedures could have resulted in noncompliance with the Criteria or Specific Requirements section above. Perspective: While ATS did not have documented procurement policies and procedures compliant with 2 CFR §200.320, ATS did establish a documented selection criteria policy for contractors under its Federal program. With this policy ATS created a selection subcommittee to review, evaluate and select contractors. The subcommittee evaluated the applications received and chose the contractors based on several selection criteria. Each contractor’s application was sent for review and approval by prime awardee. Within a random sample of 4 procurement contracts, 4 were selected based on the selection criteria policy established. Questioned Costs: Questioned costs were not identified. Repeat Finding: Not applicable. Recommendation: ATS should update its procurement policy to include requirements for procurement of property or services required under a Federal award or subaward to ensure compliance with the Uniform Guidance.
Uniform Guidance requires written policies for the requirements outlined in 2 CFR 200.302(b)(7), 2 CFR 200.318(c)(1), 2 CFR 200.318(c)(2), 2 CFR 200.320(b)(2), and 2 CFR 200.319(d). The Village does not have written policies in place for the requirements outlined in the Code of Federal Regulations sections referenced above.
2023-002 Internal Controls over Period of Performance and Procurement, Suspension and Debarment (Material Weakness) U.S. Department of Housing and Urban Development 14.267 Continuum of Care Program 2023-2024 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.403 (g) and (h), the Organization’s expenditures must be adequately documented and incurred during the approved budget period, respectively. Furthermore, under 2 CFR Section 200.320, the Organization must have and use documented procurement procedures for acquisition of property and services under a federal award or a sub-award. Condition: AIH’s control process relied on the review of Director of Housing and Supportive Services for maintaining compliance with the period of performance and procurement, suspension and debarment requirements under the Compliance Supplement. However, that control appears to not have worked as intended during the year because of identified fraud relating to questionable procurements for certain services obtained throughout the year that were subject to approval and review by the Director of Housing and Supporting Services. Note that the fraud was identified by management and has already been reported to the grantor. In addition, an accrual for the fraudulent reimbursements was recorded at year end. Cause: The Director of Housing and Supportive Services did not adequately review credit card and check transactions to ensure transactions were for legitimate business purposes and within the period of performance. Effect: Allowable cost was not required to be tested under the compliance supplement. However, AIH has already identified and accrued for remittances to be made to the grantor for fraudulent reimbursements. For testing of period of performance and procurement, suspension and debarment compliance requirements, sample sizes had to be increased to gain comfort over the requirements to be tested. No compliance issues were identified during our testing. Questioned Costs: $33,439 Perspective: Identified fraud by management was specific to one former program coordinator and one former case manager. Repeat Finding: No Recommendation: Director of Housing and Supportive Services and any other approvers should be retrained to identify allowable and reasonable costs under the grant before approving such requests. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
2023-002 Internal Controls over Period of Performance and Procurement, Suspension and Debarment (Material Weakness) U.S. Department of Housing and Urban Development 14.267 Continuum of Care Program 2023-2024 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.403 (g) and (h), the Organization’s expenditures must be adequately documented and incurred during the approved budget period, respectively. Furthermore, under 2 CFR Section 200.320, the Organization must have and use documented procurement procedures for acquisition of property and services under a federal award or a sub-award. Condition: AIH’s control process relied on the review of Director of Housing and Supportive Services for maintaining compliance with the period of performance and procurement, suspension and debarment requirements under the Compliance Supplement. However, that control appears to not have worked as intended during the year because of identified fraud relating to questionable procurements for certain services obtained throughout the year that were subject to approval and review by the Director of Housing and Supporting Services. Note that the fraud was identified by management and has already been reported to the grantor. In addition, an accrual for the fraudulent reimbursements was recorded at year end. Cause: The Director of Housing and Supportive Services did not adequately review credit card and check transactions to ensure transactions were for legitimate business purposes and within the period of performance. Effect: Allowable cost was not required to be tested under the compliance supplement. However, AIH has already identified and accrued for remittances to be made to the grantor for fraudulent reimbursements. For testing of period of performance and procurement, suspension and debarment compliance requirements, sample sizes had to be increased to gain comfort over the requirements to be tested. No compliance issues were identified during our testing. Questioned Costs: $33,439 Perspective: Identified fraud by management was specific to one former program coordinator and one former case manager. Repeat Finding: No Recommendation: Director of Housing and Supportive Services and any other approvers should be retrained to identify allowable and reasonable costs under the grant before approving such requests. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
2023-002 Internal Controls over Period of Performance and Procurement, Suspension and Debarment (Material Weakness) U.S. Department of Housing and Urban Development 14.267 Continuum of Care Program 2023-2024 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.403 (g) and (h), the Organization’s expenditures must be adequately documented and incurred during the approved budget period, respectively. Furthermore, under 2 CFR Section 200.320, the Organization must have and use documented procurement procedures for acquisition of property and services under a federal award or a sub-award. Condition: AIH’s control process relied on the review of Director of Housing and Supportive Services for maintaining compliance with the period of performance and procurement, suspension and debarment requirements under the Compliance Supplement. However, that control appears to not have worked as intended during the year because of identified fraud relating to questionable procurements for certain services obtained throughout the year that were subject to approval and review by the Director of Housing and Supporting Services. Note that the fraud was identified by management and has already been reported to the grantor. In addition, an accrual for the fraudulent reimbursements was recorded at year end. Cause: The Director of Housing and Supportive Services did not adequately review credit card and check transactions to ensure transactions were for legitimate business purposes and within the period of performance. Effect: Allowable cost was not required to be tested under the compliance supplement. However, AIH has already identified and accrued for remittances to be made to the grantor for fraudulent reimbursements. For testing of period of performance and procurement, suspension and debarment compliance requirements, sample sizes had to be increased to gain comfort over the requirements to be tested. No compliance issues were identified during our testing. Questioned Costs: $33,439 Perspective: Identified fraud by management was specific to one former program coordinator and one former case manager. Repeat Finding: No Recommendation: Director of Housing and Supportive Services and any other approvers should be retrained to identify allowable and reasonable costs under the grant before approving such requests. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
2023-002 Internal Controls over Period of Performance and Procurement, Suspension and Debarment (Material Weakness) U.S. Department of Housing and Urban Development 14.267 Continuum of Care Program 2023-2024 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.403 (g) and (h), the Organization’s expenditures must be adequately documented and incurred during the approved budget period, respectively. Furthermore, under 2 CFR Section 200.320, the Organization must have and use documented procurement procedures for acquisition of property and services under a federal award or a sub-award. Condition: AIH’s control process relied on the review of Director of Housing and Supportive Services for maintaining compliance with the period of performance and procurement, suspension and debarment requirements under the Compliance Supplement. However, that control appears to not have worked as intended during the year because of identified fraud relating to questionable procurements for certain services obtained throughout the year that were subject to approval and review by the Director of Housing and Supporting Services. Note that the fraud was identified by management and has already been reported to the grantor. In addition, an accrual for the fraudulent reimbursements was recorded at year end. Cause: The Director of Housing and Supportive Services did not adequately review credit card and check transactions to ensure transactions were for legitimate business purposes and within the period of performance. Effect: Allowable cost was not required to be tested under the compliance supplement. However, AIH has already identified and accrued for remittances to be made to the grantor for fraudulent reimbursements. For testing of period of performance and procurement, suspension and debarment compliance requirements, sample sizes had to be increased to gain comfort over the requirements to be tested. No compliance issues were identified during our testing. Questioned Costs: $33,439 Perspective: Identified fraud by management was specific to one former program coordinator and one former case manager. Repeat Finding: No Recommendation: Director of Housing and Supportive Services and any other approvers should be retrained to identify allowable and reasonable costs under the grant before approving such requests. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
2023-002 Internal Controls over Period of Performance and Procurement, Suspension and Debarment (Material Weakness) U.S. Department of Housing and Urban Development 14.267 Continuum of Care Program 2023-2024 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.403 (g) and (h), the Organization’s expenditures must be adequately documented and incurred during the approved budget period, respectively. Furthermore, under 2 CFR Section 200.320, the Organization must have and use documented procurement procedures for acquisition of property and services under a federal award or a sub-award. Condition: AIH’s control process relied on the review of Director of Housing and Supportive Services for maintaining compliance with the period of performance and procurement, suspension and debarment requirements under the Compliance Supplement. However, that control appears to not have worked as intended during the year because of identified fraud relating to questionable procurements for certain services obtained throughout the year that were subject to approval and review by the Director of Housing and Supporting Services. Note that the fraud was identified by management and has already been reported to the grantor. In addition, an accrual for the fraudulent reimbursements was recorded at year end. Cause: The Director of Housing and Supportive Services did not adequately review credit card and check transactions to ensure transactions were for legitimate business purposes and within the period of performance. Effect: Allowable cost was not required to be tested under the compliance supplement. However, AIH has already identified and accrued for remittances to be made to the grantor for fraudulent reimbursements. For testing of period of performance and procurement, suspension and debarment compliance requirements, sample sizes had to be increased to gain comfort over the requirements to be tested. No compliance issues were identified during our testing. Questioned Costs: $33,439 Perspective: Identified fraud by management was specific to one former program coordinator and one former case manager. Repeat Finding: No Recommendation: Director of Housing and Supportive Services and any other approvers should be retrained to identify allowable and reasonable costs under the grant before approving such requests. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
2023-002 Internal Controls over Period of Performance and Procurement, Suspension and Debarment (Material Weakness) U.S. Department of Housing and Urban Development 14.267 Continuum of Care Program 2023-2024 Funding Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.403 (g) and (h), the Organization’s expenditures must be adequately documented and incurred during the approved budget period, respectively. Furthermore, under 2 CFR Section 200.320, the Organization must have and use documented procurement procedures for acquisition of property and services under a federal award or a sub-award. Condition: AIH’s control process relied on the review of Director of Housing and Supportive Services for maintaining compliance with the period of performance and procurement, suspension and debarment requirements under the Compliance Supplement. However, that control appears to not have worked as intended during the year because of identified fraud relating to questionable procurements for certain services obtained throughout the year that were subject to approval and review by the Director of Housing and Supporting Services. Note that the fraud was identified by management and has already been reported to the grantor. In addition, an accrual for the fraudulent reimbursements was recorded at year end. Cause: The Director of Housing and Supportive Services did not adequately review credit card and check transactions to ensure transactions were for legitimate business purposes and within the period of performance. Effect: Allowable cost was not required to be tested under the compliance supplement. However, AIH has already identified and accrued for remittances to be made to the grantor for fraudulent reimbursements. For testing of period of performance and procurement, suspension and debarment compliance requirements, sample sizes had to be increased to gain comfort over the requirements to be tested. No compliance issues were identified during our testing. Questioned Costs: $33,439 Perspective: Identified fraud by management was specific to one former program coordinator and one former case manager. Repeat Finding: No Recommendation: Director of Housing and Supportive Services and any other approvers should be retrained to identify allowable and reasonable costs under the grant before approving such requests. Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Supplemental Nutrition Assistance Program Cluster Assistance Listing Number: 10.561 Federal Award Identification Number and Year: 228MN300S6031 – 2023 Passed Through Entity: Minnesota Department of Human Services Pass Through Numbers: H55230010 Award Period: 2023 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: The County must follow Uniform Guidance Subsection 200.320 Methods of Procurement for all applicable procurements over the County’s micro-purchase threshold. For purchases over the County's micro-purchase threshold of $10,000 but not exceeding the simplified acquisition threshold of $250,000, the County should follow small purchase procedures. 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 County. Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During our testing, it was noted that for 2 contracts out of 4 tested the County was unable to provide documentation showing they contract awards followed the open competition requirement. Questioned costs: None Context: 2 out of the 4 contracts tested had no documentation of open competition. Cause: The county purchasing likely followed county purchase policies for non-federal expenditures. Effect: It would be possible that the County could end up spending more federal dollars than necessary for a product or service, if they are not going through the steps to ensure they are utilizing the best vendor for the county and documenting this process each year. Repeat finding: No Recommendation: We recommend the County follow their federal purchasing policy in all of their federal programs and retain documentation of that process occurring. As necessary, the County may need to add internal controls that are program specific to ensure this properly occurs. Views of responsible officials: There is no disagreement with the finding.
Item 2023-005: Procurement Identification of federal programs: Food Distribution Cluster, Assistance Listing Number 10.565, 10.568, and 10.569 Federal award grant number: 204645, 203684, and 229353 Federal agency: U.S. Department of Agriculture Pass-through entity: Minnesota Department of Health and Minnesota Department of Human Services Criteria: The Uniform Guidance (2 CFR 200.320) and SHNLFB’s procurement policy require that micro-purchases may be awarded without soliciting competitive quotations if SHNLFB considers the price to be reasonable and small purchases require price or rate quotations to be obtained from an adequate number of qualified sources. Condition: During our testing of procurement requirements, we noted that for two of the small purchase disbursements selected for testing, there was no vendor selection form. The vendor selection form identifies the price and the method selected as well as requires review and approval. Without the form, the procurement documentation does not exist for small purchase disbursements. Cause: The exceptions noted above were due to a breakdown in SHNLFB’s procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. Effect: Improper procurement procedures can result in actions taken by oversight agencies which could impact future funding. Questioned costs: $49,118 Context: The population subject to procurement requirements included 60 micro-purchase vendors and nine small purchase vendors. The sample size of six micro-purchase procurements and two small purchase procurements was determined using the guidance in the AICPA Audit and Accounting Guide—Government Auditing Standards and Single Audits. Repeat finding: Yes Recommendation: SHNLFB should continue to improve its procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. It is also recommended that support documenting the procurements be maintained. Views of responsible officials of the auditee: SHNLFB concurs with this finding and a response is included in the corrective action plan.
Item 2023-005: Procurement Identification of federal programs: Food Distribution Cluster, Assistance Listing Number 10.565, 10.568, and 10.569 Federal award grant number: 204645, 203684, and 229353 Federal agency: U.S. Department of Agriculture Pass-through entity: Minnesota Department of Health and Minnesota Department of Human Services Criteria: The Uniform Guidance (2 CFR 200.320) and SHNLFB’s procurement policy require that micro-purchases may be awarded without soliciting competitive quotations if SHNLFB considers the price to be reasonable and small purchases require price or rate quotations to be obtained from an adequate number of qualified sources. Condition: During our testing of procurement requirements, we noted that for two of the small purchase disbursements selected for testing, there was no vendor selection form. The vendor selection form identifies the price and the method selected as well as requires review and approval. Without the form, the procurement documentation does not exist for small purchase disbursements. Cause: The exceptions noted above were due to a breakdown in SHNLFB’s procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. Effect: Improper procurement procedures can result in actions taken by oversight agencies which could impact future funding. Questioned costs: $49,118 Context: The population subject to procurement requirements included 60 micro-purchase vendors and nine small purchase vendors. The sample size of six micro-purchase procurements and two small purchase procurements was determined using the guidance in the AICPA Audit and Accounting Guide—Government Auditing Standards and Single Audits. Repeat finding: Yes Recommendation: SHNLFB should continue to improve its procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. It is also recommended that support documenting the procurements be maintained. Views of responsible officials of the auditee: SHNLFB concurs with this finding and a response is included in the corrective action plan.
Item 2023-005: Procurement Identification of federal programs: Food Distribution Cluster, Assistance Listing Number 10.565, 10.568, and 10.569 Federal award grant number: 204645, 203684, and 229353 Federal agency: U.S. Department of Agriculture Pass-through entity: Minnesota Department of Health and Minnesota Department of Human Services Criteria: The Uniform Guidance (2 CFR 200.320) and SHNLFB’s procurement policy require that micro-purchases may be awarded without soliciting competitive quotations if SHNLFB considers the price to be reasonable and small purchases require price or rate quotations to be obtained from an adequate number of qualified sources. Condition: During our testing of procurement requirements, we noted that for two of the small purchase disbursements selected for testing, there was no vendor selection form. The vendor selection form identifies the price and the method selected as well as requires review and approval. Without the form, the procurement documentation does not exist for small purchase disbursements. Cause: The exceptions noted above were due to a breakdown in SHNLFB’s procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. Effect: Improper procurement procedures can result in actions taken by oversight agencies which could impact future funding. Questioned costs: $49,118 Context: The population subject to procurement requirements included 60 micro-purchase vendors and nine small purchase vendors. The sample size of six micro-purchase procurements and two small purchase procurements was determined using the guidance in the AICPA Audit and Accounting Guide—Government Auditing Standards and Single Audits. Repeat finding: Yes Recommendation: SHNLFB should continue to improve its procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. It is also recommended that support documenting the procurements be maintained. Views of responsible officials of the auditee: SHNLFB concurs with this finding and a response is included in the corrective action plan.
Item 2023-005: Procurement Identification of federal programs: Food Distribution Cluster, Assistance Listing Number 10.565, 10.568, and 10.569 Federal award grant number: 204645, 203684, and 229353 Federal agency: U.S. Department of Agriculture Pass-through entity: Minnesota Department of Health and Minnesota Department of Human Services Criteria: The Uniform Guidance (2 CFR 200.320) and SHNLFB’s procurement policy require that micro-purchases may be awarded without soliciting competitive quotations if SHNLFB considers the price to be reasonable and small purchases require price or rate quotations to be obtained from an adequate number of qualified sources. Condition: During our testing of procurement requirements, we noted that for two of the small purchase disbursements selected for testing, there was no vendor selection form. The vendor selection form identifies the price and the method selected as well as requires review and approval. Without the form, the procurement documentation does not exist for small purchase disbursements. Cause: The exceptions noted above were due to a breakdown in SHNLFB’s procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. Effect: Improper procurement procedures can result in actions taken by oversight agencies which could impact future funding. Questioned costs: $49,118 Context: The population subject to procurement requirements included 60 micro-purchase vendors and nine small purchase vendors. The sample size of six micro-purchase procurements and two small purchase procurements was determined using the guidance in the AICPA Audit and Accounting Guide—Government Auditing Standards and Single Audits. Repeat finding: Yes Recommendation: SHNLFB should continue to improve its procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. It is also recommended that support documenting the procurements be maintained. Views of responsible officials of the auditee: SHNLFB concurs with this finding and a response is included in the corrective action plan.
Item 2023-005: Procurement Identification of federal programs: Food Distribution Cluster, Assistance Listing Number 10.565, 10.568, and 10.569 Federal award grant number: 204645, 203684, and 229353 Federal agency: U.S. Department of Agriculture Pass-through entity: Minnesota Department of Health and Minnesota Department of Human Services Criteria: The Uniform Guidance (2 CFR 200.320) and SHNLFB’s procurement policy require that micro-purchases may be awarded without soliciting competitive quotations if SHNLFB considers the price to be reasonable and small purchases require price or rate quotations to be obtained from an adequate number of qualified sources. Condition: During our testing of procurement requirements, we noted that for two of the small purchase disbursements selected for testing, there was no vendor selection form. The vendor selection form identifies the price and the method selected as well as requires review and approval. Without the form, the procurement documentation does not exist for small purchase disbursements. Cause: The exceptions noted above were due to a breakdown in SHNLFB’s procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. Effect: Improper procurement procedures can result in actions taken by oversight agencies which could impact future funding. Questioned costs: $49,118 Context: The population subject to procurement requirements included 60 micro-purchase vendors and nine small purchase vendors. The sample size of six micro-purchase procurements and two small purchase procurements was determined using the guidance in the AICPA Audit and Accounting Guide—Government Auditing Standards and Single Audits. Repeat finding: Yes Recommendation: SHNLFB should continue to improve its procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. It is also recommended that support documenting the procurements be maintained. Views of responsible officials of the auditee: SHNLFB concurs with this finding and a response is included in the corrective action plan.
Item 2023-005: Procurement Identification of federal programs: Food Distribution Cluster, Assistance Listing Number 10.565, 10.568, and 10.569 Federal award grant number: 204645, 203684, and 229353 Federal agency: U.S. Department of Agriculture Pass-through entity: Minnesota Department of Health and Minnesota Department of Human Services Criteria: The Uniform Guidance (2 CFR 200.320) and SHNLFB’s procurement policy require that micro-purchases may be awarded without soliciting competitive quotations if SHNLFB considers the price to be reasonable and small purchases require price or rate quotations to be obtained from an adequate number of qualified sources. Condition: During our testing of procurement requirements, we noted that for two of the small purchase disbursements selected for testing, there was no vendor selection form. The vendor selection form identifies the price and the method selected as well as requires review and approval. Without the form, the procurement documentation does not exist for small purchase disbursements. Cause: The exceptions noted above were due to a breakdown in SHNLFB’s procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. Effect: Improper procurement procedures can result in actions taken by oversight agencies which could impact future funding. Questioned costs: $49,118 Context: The population subject to procurement requirements included 60 micro-purchase vendors and nine small purchase vendors. The sample size of six micro-purchase procurements and two small purchase procurements was determined using the guidance in the AICPA Audit and Accounting Guide—Government Auditing Standards and Single Audits. Repeat finding: Yes Recommendation: SHNLFB should continue to improve its procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. It is also recommended that support documenting the procurements be maintained. Views of responsible officials of the auditee: SHNLFB concurs with this finding and a response is included in the corrective action plan.
Item 2023-005: Procurement Identification of federal programs: Food Distribution Cluster, Assistance Listing Number 10.565, 10.568, and 10.569 Federal award grant number: 204645, 203684, and 229353 Federal agency: U.S. Department of Agriculture Pass-through entity: Minnesota Department of Health and Minnesota Department of Human Services Criteria: The Uniform Guidance (2 CFR 200.320) and SHNLFB’s procurement policy require that micro-purchases may be awarded without soliciting competitive quotations if SHNLFB considers the price to be reasonable and small purchases require price or rate quotations to be obtained from an adequate number of qualified sources. Condition: During our testing of procurement requirements, we noted that for two of the small purchase disbursements selected for testing, there was no vendor selection form. The vendor selection form identifies the price and the method selected as well as requires review and approval. Without the form, the procurement documentation does not exist for small purchase disbursements. Cause: The exceptions noted above were due to a breakdown in SHNLFB’s procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. Effect: Improper procurement procedures can result in actions taken by oversight agencies which could impact future funding. Questioned costs: $49,118 Context: The population subject to procurement requirements included 60 micro-purchase vendors and nine small purchase vendors. The sample size of six micro-purchase procurements and two small purchase procurements was determined using the guidance in the AICPA Audit and Accounting Guide—Government Auditing Standards and Single Audits. Repeat finding: Yes Recommendation: SHNLFB should continue to improve its procedures to ensure that all procurements of goods and services are in accordance with the Uniform Guidance and its procurement policy. It is also recommended that support documenting the procurements be maintained. Views of responsible officials of the auditee: SHNLFB concurs with this finding and a response is included in the corrective action plan.
2 CFR 200 outlines the following policies required for a County spending Coronavirus State and Local Fiscal Recovery Funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; • 2 CFR 200.430 for allowability of compensation costs; 2 CFR 200.464(a)(2) for reimbursement of relocation costs; • 2 CFR 200.318(c)(1) for employee conflicts of interest; • 2 CFR 200.318(c)(2) for organizational conflicts of interest; • 2 CFR 200.320(b)(2) for selection and awarding of contracts for competitive proposals; • 2 CFR 200.319(d) for minimum evaluation criteria for bids and proposals. During testing we noted that the County did not have sufficient written policies addressing the above requirements. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.
2 CFR 200 outlines the following policies required for a County spending Coronavirus State and Local Fiscal Recovery Funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; • 2 CFR 200.430 for allowability of compensation costs; 2 CFR 200.464(a)(2) for reimbursement of relocation costs; • 2 CFR 200.318(c)(1) for employee conflicts of interest; • 2 CFR 200.318(c)(2) for organizational conflicts of interest; • 2 CFR 200.320(b)(2) for selection and awarding of contracts for competitive proposals; • 2 CFR 200.319(d) for minimum evaluation criteria for bids and proposals. During testing we noted that the County did not have sufficient written policies addressing the above requirements. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.
2 CFR 200 outlines the following policies required for a County spending Coronavirus State and Local Fiscal Recovery Funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; • 2 CFR 200.430 for allowability of compensation costs; 2 CFR 200.464(a)(2) for reimbursement of relocation costs; • 2 CFR 200.318(c)(1) for employee conflicts of interest; • 2 CFR 200.318(c)(2) for organizational conflicts of interest; • 2 CFR 200.320(b)(2) for selection and awarding of contracts for competitive proposals; • 2 CFR 200.319(d) for minimum evaluation criteria for bids and proposals. During testing we noted that the County did not have sufficient written policies addressing the above requirements. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.
2 CFR 200 outlines the following policies required for a County spending Coronavirus State and Local Fiscal Recovery Funds: • 2 CFR 200.302(b)(7) for determining the allowability of costs in accordance with Subpart E-Cost Principles; • 2 CFR 200.430 for allowability of compensation costs; 2 CFR 200.464(a)(2) for reimbursement of relocation costs; • 2 CFR 200.318(c)(1) for employee conflicts of interest; • 2 CFR 200.318(c)(2) for organizational conflicts of interest; • 2 CFR 200.320(b)(2) for selection and awarding of contracts for competitive proposals; • 2 CFR 200.319(d) for minimum evaluation criteria for bids and proposals. During testing we noted that the County did not have sufficient written policies addressing the above requirements. Failure to adopt and implement policies could lead to noncompliance with federal requirements. We recommend the County approve and implement the above policies to ensure compliance with federal requirements.
Assistance Listing, Federal Agency, and Program Name 21.027 U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year MH 1251 2023 Pass through Entity The Ohio Department of Mental Health and Addiction Services Finding Type Significant deficiency Repeat Finding No Criteria Per 2 CFR 200.320, an entity must have written procurement procedures that address the procurement methods outlined throughout 2 CFR 200.318, 200.319, and 200.320. Condition Controls in place were not adequate to ensure the policy included appropriate procurement thresholds and methods. Questioned Costs N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context ProMedica did not include all requirements outlined throughout 2 CFR 200.318, 200.319, and 200.320 for procurement methods in their written policy. Cause and Effect ProMedica has written procurement procedures in place, however these policies did not include all requirements outlined throughout 2 CFR 200.318, 200.319, and 200.320. This lack of controls could lead to noncompliance with the Uniform Guidance requirement to have written policies. Recommendation Management should implement controls to ensure all procurement policies align with the guidance in 2 CFR 200.318, 200.319, and 200.320. Views of Responsible Officials and Planned Corrective Actions Management understands the importance of adhering to procurement thresholds and methods. Procurement policies and grant policies will be updated to include federal thresholds and methods to reflect federal Uniform Guidance.
FINDING 2023-004 Subject: Drinking Water State Revolving Fund (DWSRF) Cluster - Procurement and Suspension and Debarment Federal Agency: Environmental Protection Agency Federal Program: Drinking Water State Revolving Fund Assistance Listings Number: 66.468 Federal Award Number and Year (or Other Identifying Number): DW23150901 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed or implemented at the City to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement - Policy The City had not established a purchasing policy that reflected applicable state laws and regulations, including procedures to avoid the acquisition of unnecessary or duplicative items and procedures to ensure that all solicitations incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Additionally, the City did not maintain a policy that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in evaluation of bids or proposals. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Procurement - Small Purchases The City expended federal funds to pay 12 separate vendors to provide goods and services for the duration of the City's Lead Service Line Replacement project. A population of 5 vendors had aggregated expenditures for the audit period that were less than the simplified acquisition threshold of $150,000 but exceeded the $10,000 micro-purchase threshold. All 5 vendors were tested; for 2 of the 5 vendors, the City was unable to provide any documentation that the procurement method used was appropriate or that the procurement provided full and open competition or rationale to support the determination to limit competition. The history of the procurement, including rationale for the method of procurement, selection of the vendor, and the basis for the price, was not adequately documented. Suspension and Debarment Prior to entering into subawards and covered transactions with award funds, recipients are required to verify that vendors are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. Due to the agreement with the Indiana Finance Authority (IFA), the City was not required to perform testing over suspension and debarment for a majority of the vendors used; however, several drawdowns from the State Revolving Funds (SRF) program were used to reimburse the City for payments made to specific vendors. The vendors paid directly by the City were not included in the IFA's procedures for checking suspension and debarment, therefore, the City was obligated to meet the requirement. The City did not maintain a set of procedures for checking suspension and debarment status of vendors for expenditures related to the SRF awards. A total of two vendors paid directly by the City exceeded the suspension and debarment threshold of $25,000 and were subject to testing. No documentation to show that suspension and debarment was verified prior to entering into the contract could be provided for either vendor. The lack of internal controls and noncompliance was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 23 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases– (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM.gov Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." 2 CFR 200.214 states: "Non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities." 2 CFR 200.318(a) states: "The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327." INDIANA STATE BOARD OF ACCOUNTS 24 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.318(d) states: "The non-Federal entity's procedures must avoid acquisition of unnecessary or duplicative items. Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase. Where appropriate, an analysis will be made of lease versus purchase alternatives, and any other appropriate analysis to determine the most economical approach." 2 CFR 200.319(c) states: "The non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state, local, or tribal geographical preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. Nothing in this section preempts state licensing laws. When contracting for architectural and engineering (A/E) services, geographic location may be a selection criterion provided its application leaves an appropriate number of qualified firms, given the nature and size of the project, to compete for the contract." 2 CFR 200.319(d) states: "The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Detailed product specifications should be avoided if at all possible. When it is impractical or uneconomical to make a clear and accurate description of the technical requirements, a 'brand name or equivalent' description may be used as a means to define the performance or other salient requirements of procurement. The specific features of the named brand which must be met by offers must be clearly stated; and (2) Identify all requirements which the offerors must fulfill and all other factors to be used in evaluating bids or proposals." Cause The City did not maintain a procurement policy that would demonstrate the appropriate procedures to be followed when procuring with federal funding and were not aware of the need to follow federal guidelines for procurement or suspension and debarment for expenditures associated with the SRF awards. Effect Without a proper system of internal controls in place that operated effectively, noncompliance remained undetected. As a result, proper procurement procedures were not adhered to for all vendors. Without following the required methods for procurement, the City could be overpaying for services or providing federal funds to an entity that is suspended or debarred. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funds to the City. INDIANA STATE BOARD OF ACCOUNTS 25 CITY OF LOGANSPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City's management establish a proper system of internal controls to ensure expenditures made from federal awards use the appropriate procurement method and retain the documentation to support the procurement methods used in order to ensure compliance with the terms and conditions of the federal award and ensure that vendors paid from federal funds are neither suspended nor debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2023-002: Material Weakness - Lack of Documentation on Sole Source Contracts and Verification of Vendors Federal grantor: Department of Commerce Condition: The Chamber contract with a vendor on a sole-source basis and did not document justification for the use of a sole source vendor. In addition, the Chamber did not verify that the vendor was not on the list of vendors suspended or debarred from federal contracting before contracting with the vendor. Criteria: Entities are required to follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320 and noncompetitive procurements. Entities also must comply with 2 CFR Part 1326 that prohibits entities that have been debarred, suspended or voluntarily excluded from participating in Federal procurement. Cause: The Chamber’s Procurement Policy allows for a sole source vendor but requires staff to document sole source procurements prior to initial purchase. It appears staff did not follow its policy. The Policy also contains a requirement to verify or receive vendor certification that they are not debarred, suspended, ineligible or voluntarily excluded from Federal procurements, but this procedure was not followed. Effect: The Department of Commerce may impose additional conditions on the receipt of a subsequent tranche of future award funds, if any, or take other available remedies as set forth in 2 C.F.C. section 200.339. Recommendation: We recommend the Chamber review policies with staff to ensure procurement requirements are followed, and that staff are familiar with federal procurement requirements. Views of Responsible Officials and Planned Corrective Actions: The Chamber agrees with this finding and is in the process of implementing changes to their procurement process.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Cluster Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: H80CS12856 Award Periods: March 1, 2023 – February 29, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: 2 CFR section 200.320 outlines the acceptable methods of procurement. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require that price or rate quotations be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Noncompetitive procurement can be used in certain circumstances however the non-Federal entity is to maintain appropriate supporting documentation justifying the use of sole source procurement consistent with 2 CFR 200.320(c). Condition: The Organization did not have a procurement policy or suspension and debarment policy in place which was consistent with the requirements of the Uniform Guidance. As a result, the organization did not maintain appropriate documentation to support the procurement method utilized for contracts selected for testing. Questioned costs: None. Context: Eight (8) of eight (8) procurement transactions selected for testing. Cause: The Organization did not create and maintain appropriate documentation to support the method of procurement utilized. Effect: Possible noncompliance with 2 CFR section 200.320(c)(1) - (3). Repeat finding: No. Recommendation: We recommend the Organization revise its procurement and suspension and debarment policies to be consistent with the Uniform Guidance and consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the method of procurement utilized. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Cluster Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: H80CS12856 Award Periods: March 1, 2023 – February 29, 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-Federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: As a result of the lack of a suspension and debarment policy, the organization did not document that Sam.gov was checked prior to entering into a contract with a vendor. Questioned costs: None. Context: Five (5) of five (5) vendors selected for testing did not have evidence prior to contracting of a check for suspension and debarment. However, subsequent review showed evidence the vendors were not suspended and debarred. Cause: Employee turnover. Effect: Possible noncompliance with 2 CFR section 200.320(c)(1) - (3). Repeat finding: No. Recommendation: We recommend that the organization retain documentation that Sam.gov was used to verify that a vendor was not suspended, debarred, or otherwise excluded from participating in the transaction prior to contract. The organization can keep screenshots that Sam.gov was checked or a PDF print out of the web page which includes the date verified. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.
Finding 2023-003 – Procurement, Non-compliance (Material Weakness) Federal programs: U.S. Department of Treasury – ALN 21.027, Covid-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), and Research and Development Cluster Criteria: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. Non-federal entities must also ensure that every purchase order or other contract includes provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CRF Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards”. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Context: During our testing of procurement for the Research and Development Cluster, we noted that the Organization did not provide adequate documentation of price or rate quotations from a qualified number of sources for 3 of 40 items tested that met the small purchase threshold. For an additional 4 of the 40 items that met the small purchase threshold and were single sourced, the Organization could not provide adequate documentation of the sole source justification being documented prior to the purchase being made. The sample was not statistically valid. During our testing of procurement for Coronavirus State and Local Fiscal Recovery Funds ALN 21.027, we noted that 3 of the 3 contracts entered into did not include the proper contract flow-down provisions. Additionally, 2 of the 3 contracts that met the small purchase threshold and were sole sourced did not include adequate documentation of sole source justification prior to the purchase. Cause: The Organization did not properly identify certain purchase orders or other contracts as federal award transactions subject to procurement regulations. Effect: Internal controls were not properly implemented to reduce the risk of noncompliance and the Organization was not in compliance with Federal procurement requirements.Questioned costs: None Repeat finding: No Recommendation: We recommend management review internal controls over identification of federal contracts for adequacy and ensure internal controls over the procurement process are properly implemented. Views of responsible officials: Management agrees with the finding and the auditors’ recommendation. See Corrective Action Plan at the end of the report.