Federal Program Research and Development Cluster ALNs 12.RD, 81.087, 93.RD, 93.173, 93.273, 93.336, 93.837, 93.839, 93.847, 93.855, 93.865, 93.866 Federal Agencies Department of Defense, Department of Energy, Department of Health and Human Services Pass-through Entity Various Federal Award Year Ranges from September 23, 2016 – September 30, 2025 Criteria or Requirement 2 CFR 200.320(a)(2)(i) states that small purchase procedures for non-Federal entities includes 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. The University's procurement policies and procedures for small purchases requires the University's purchaser to conduct and select a supplier through a competitive bidding process for items ranging between $10,000 and $50,000. The University's procurement policies state that competitive bidding is not required when purchasing goods or services from a University contracted supplier or for directed sole source purchases. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to comply with the University's purchasing policies and procedures. Condition Found, including perspective University purchasers have the ability to request payment for goods or services purchased by submitting a requisition in Panther Express for the order to be routed to the Purchasing Department for review and approval, or an other payment request (OPR) specialty form is completed and submitted with the invoice in Panther Express which bypasses the Purchasing Department to Payment Processing for review and check processing. We identified one out of the 40 procurements sampled for testing did not have the required competitive bidding documentation for purchases ranging between $10,000 and $50,000 because the University purchaser utilized the OPR form bypassing the Purchasing Department review. The Purchasing Department subsequently ran queries from its system for a list of all Research and Development cluster (R&D) expenditures exceeding $10,000 that utilized the OPR form that did not have the required competitive bidding documentation and identified 24 purchases (including our sampled item) from multiple University purchasers totaling approximately $402,000, which is 0.04% of total R&D expenditures. None of these purchases were from a University contracted supplier, and there was no directed or sole source documentation filed, which is a violation of the University procurement policies. Cause University purchasers did not follow University payment procedures for procurements exceeding $10,000 to be reviewed and approved by the Purchasing Department prior to disbursement. Effect Failure to properly follow University payment and procurement policies could result in noncompliance and/or the use of an inappropriate vendor. Questioned Costs No questioned costs were identified. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding No. Recommendation We recommend that the University reinforce its procurement policies and procedures to all departments to ensure all the University’s procurement policies are being followed. Views of Responsible Officials Management agrees with the finding and the following corrective actions are being taken to minimize future risks. First, although all purchasers are required to complete training on purchasing and payment policies prior to obtaining system access, a refresher policy training will be provided to the 13 departments in which exceptions were discovered along with a reminder communication to all the approximately 4,300 department purchasers. This will be completed by June 30, 2024. Second, for certain types of purchases such as those involving intellectual property rights, suppliers may complete work in good faith and request payment in the absence of a purchase order or contract. A new procedure has been instituted requiring the department/supplier to execute a contract prior to payment in order to minimize legal risks to the University and its funding agencies. This new procedure is complete. Finally, we are analyzing legitimate uses of the OPRS form and evaluating whether placing a maximum dollar limit, such as $5,000, for the use of the form will further strengthen internal controls. The evaluation will be completed by June 30, 2024. Implementing maximum dollar limits on the OPRS form will require IT changes, and therefore implementation will not occur until December 31, 2024.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from ‘Communities in Schools’ totaling $26,000.CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: $26,000 CAUSE: It was not readily determinable as to why the District did not adhere to its Procurement Policy for Federal Programs (#626.5) which addresses the issue of noncompetitive procurement as outline in Section 2 CFR 200.320(c’). RECOMMENDATION: I recommend that for all future purchases involving noncompetitive procurement, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), and 2) Section 2 CFR 200.320(c) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from ‘Communities in Schools’ totaling $26,000.CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: $26,000 CAUSE: It was not readily determinable as to why the District did not adhere to its Procurement Policy for Federal Programs (#626.5) which addresses the issue of noncompetitive procurement as outline in Section 2 CFR 200.320(c’). RECOMMENDATION: I recommend that for all future purchases involving noncompetitive procurement, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), and 2) Section 2 CFR 200.320(c) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from ‘Communities in Schools’ totaling $26,000.CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: $26,000 CAUSE: It was not readily determinable as to why the District did not adhere to its Procurement Policy for Federal Programs (#626.5) which addresses the issue of noncompetitive procurement as outline in Section 2 CFR 200.320(c’). RECOMMENDATION: I recommend that for all future purchases involving noncompetitive procurement, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), and 2) Section 2 CFR 200.320(c) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from ‘Communities in Schools’ totaling $26,000.CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: $26,000 CAUSE: It was not readily determinable as to why the District did not adhere to its Procurement Policy for Federal Programs (#626.5) which addresses the issue of noncompetitive procurement as outline in Section 2 CFR 200.320(c’). RECOMMENDATION: I recommend that for all future purchases involving noncompetitive procurement, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626.5), and 2) Section 2 CFR 200.320(c) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
Finding 2023-002: Procurement Information of the Federal Program: Assistance Listing Number 19.345 Criteria: CFR 200.318 states that non-Federal entities must have and use documented procurement procedures consistent with the requirements for procurement regulations included in paragraphs 318 through 327. Condition: The Organization did not provide supporting documentation for certain procurement decisions, and we noted instances where a memo was used to justify noncompetitive procurement when it was not clearly justified by one of the reasons permitted within CFR 200.320: The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; The item is available only from a single source; The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; After solicitation of a number of sources, competition is determined inadequate. Cause: The Organization has a procedure in place to ensure all vendors or suppliers paid with Federal funding are engaged in compliance with the Federal regulations but compliance with the policy was not always documented. Effect or Potential Effect: The Organization may have disallowed costs for not properly procuring goods or services. Questioned Costs: None noted Context: The Organization is at risk of entering into contracts for goods or services under Federal awards that were not adequately procured based on the regulations in the Uniform Guidance and the awarding agency could disallow the costs paid for the goods or services. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that the Organization update its policies and procedures to ensure compliance with CFR 200.320 regarding noncompetitive procurement. In addition, we recommend that documentation be maintained for all procurement decisions in accordance with established policy.
Finding 2023-002: Procurement Information of the Federal Program: Assistance Listing Number 19.345 Criteria: CFR 200.318 states that non-Federal entities must have and use documented procurement procedures consistent with the requirements for procurement regulations included in paragraphs 318 through 327. Condition: The Organization did not provide supporting documentation for certain procurement decisions, and we noted instances where a memo was used to justify noncompetitive procurement when it was not clearly justified by one of the reasons permitted within CFR 200.320: The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold; The item is available only from a single source; The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; After solicitation of a number of sources, competition is determined inadequate. Cause: The Organization has a procedure in place to ensure all vendors or suppliers paid with Federal funding are engaged in compliance with the Federal regulations but compliance with the policy was not always documented. Effect or Potential Effect: The Organization may have disallowed costs for not properly procuring goods or services. Questioned Costs: None noted Context: The Organization is at risk of entering into contracts for goods or services under Federal awards that were not adequately procured based on the regulations in the Uniform Guidance and the awarding agency could disallow the costs paid for the goods or services. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend that the Organization update its policies and procedures to ensure compliance with CFR 200.320 regarding noncompetitive procurement. In addition, we recommend that documentation be maintained for all procurement decisions in accordance with established policy.
2023-002: Compliance and Internal Control over Procurement - Sole Source and Suspension and Debarment Special Education Cluster Assistance Listing Numbers – 84.027A; 84.027X; 84.173A; and 87.173X Passthrough Agency: Louisiana Department of Education Questioned Costs: $84,880 Criteria: The Uniform Guidance Federal regulations per 2 CFR section 200.320 requires, among other things, that specific criteria be met for the procurement of noncompetitive proposals. Procurement of noncompetitive proposals is procurement through solicitation of a proposal from only one source, also known as a sole source vendor. This method may only be used when one or more of the following circumstances apply: • The item is available only from a single source. • The purchase is in response to a public emergency that will not permit a delay resulting from the competitive process. • The purchase is expressly authorized by awarding or pass-through agency in response to a written request from the non-Federal entity or after solicitation of a number of sources, competition is determined inadequate. To ensure compliance with these requirements, justification of the use of noncompetitive proposals and research on the availability from multiple sources must be documented. Documentation of authorization must be retained, and any initial solicitations from multiple sources which are concluded to be inadequate, and such reasoning must be documented. In addition, non-federal entities are prohibited from contracting with or making sub-awards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods or services awarded under a non-procurement transaction (e.g. a grant or cooperative agreement) that is expected to equal or exceed $25,000. Universe/Population: The total population for procurement considerations was all vendors of the Special Education Cluster whose transactions for the year ended June 30, 2023, exceeded the micro-purchase threshold of $10,000. Payroll and benefit-related transactions were excluded from the population. Based on these requirements, the population consisted of thirty-eight vendors totaling $1,729,409. There was a total of twenty-four vendors whose payments exceeded $25,000 when considering compliance with suspension and debarment regulations. Only five of the twenty-four were related to covered transactions.Condition: Five vendors with expenditures totaling $654,205 were selected for testing. We noted one of the vendors selected for testing was deemed to be a sole source provider of reading teacher support packages by the School Board totaling $84,880. A sole source letter was obtained from the vendor, which outlined the uniqueness of the goods and services to be provided. However, it was determined that School Board did not appropriately follow the process for reviewing and documentation a sole source provider, per their federal procurement policy. This is a partially repeated finding from the prior fiscal year. For the five vendors selected for testing over suspension and debarment, the School Board asserts it checked the sam.gov website and none of the vendors were suspended or debarred. Our testing confirmed that these five vendors were not suspended or debarred. However, documentary evidence that a vendor was not suspended or debarred was not maintained in the School Board’s records. Cause: The School Board did not adhere to its established procurement policy for noncompetitive proposals to sole source vendors and control and internal review process was not properly followed. In addition, turnover in job functions without properly documented procedures resulted in the School Board not maintaining the records needed to evidence compliance with suspension and debarment requirements. Effect: Without proper internal controls over procurement to sole source or professional service vendors or suspension and debarment regulations, the School Board may enter into contracts with vendors where the price may not be fair or reasonable or disallowed if the vendor has been suspended or debarred from doing business with the federal government. Recommendations: The School Board should strengthen controls at the program administration level to ensure appropriate consideration to competitors are given and adequate documentation is obtained with respect to procurement of professional services and sole source products in accordance with the Uniform Guidance 2 CFR section 200.320(f). In addition, all vendors paid with federal resources should be checked for suspension or debarment. This documentation should be approved by the program director, as well as the purchasing director, and retained as evidence of the internal controls over procurement and suspension and debarment. View of Responsible Official: Management concurs with this finding, see corrective action plan dated March 27, 2024.
2023-002: Compliance and Internal Control over Procurement - Sole Source and Suspension and Debarment Special Education Cluster Assistance Listing Numbers – 84.027A; 84.027X; 84.173A; and 87.173X Passthrough Agency: Louisiana Department of Education Questioned Costs: $84,880 Criteria: The Uniform Guidance Federal regulations per 2 CFR section 200.320 requires, among other things, that specific criteria be met for the procurement of noncompetitive proposals. Procurement of noncompetitive proposals is procurement through solicitation of a proposal from only one source, also known as a sole source vendor. This method may only be used when one or more of the following circumstances apply: • The item is available only from a single source. • The purchase is in response to a public emergency that will not permit a delay resulting from the competitive process. • The purchase is expressly authorized by awarding or pass-through agency in response to a written request from the non-Federal entity or after solicitation of a number of sources, competition is determined inadequate. To ensure compliance with these requirements, justification of the use of noncompetitive proposals and research on the availability from multiple sources must be documented. Documentation of authorization must be retained, and any initial solicitations from multiple sources which are concluded to be inadequate, and such reasoning must be documented. In addition, non-federal entities are prohibited from contracting with or making sub-awards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods or services awarded under a non-procurement transaction (e.g. a grant or cooperative agreement) that is expected to equal or exceed $25,000. Universe/Population: The total population for procurement considerations was all vendors of the Special Education Cluster whose transactions for the year ended June 30, 2023, exceeded the micro-purchase threshold of $10,000. Payroll and benefit-related transactions were excluded from the population. Based on these requirements, the population consisted of thirty-eight vendors totaling $1,729,409. There was a total of twenty-four vendors whose payments exceeded $25,000 when considering compliance with suspension and debarment regulations. Only five of the twenty-four were related to covered transactions.Condition: Five vendors with expenditures totaling $654,205 were selected for testing. We noted one of the vendors selected for testing was deemed to be a sole source provider of reading teacher support packages by the School Board totaling $84,880. A sole source letter was obtained from the vendor, which outlined the uniqueness of the goods and services to be provided. However, it was determined that School Board did not appropriately follow the process for reviewing and documentation a sole source provider, per their federal procurement policy. This is a partially repeated finding from the prior fiscal year. For the five vendors selected for testing over suspension and debarment, the School Board asserts it checked the sam.gov website and none of the vendors were suspended or debarred. Our testing confirmed that these five vendors were not suspended or debarred. However, documentary evidence that a vendor was not suspended or debarred was not maintained in the School Board’s records. Cause: The School Board did not adhere to its established procurement policy for noncompetitive proposals to sole source vendors and control and internal review process was not properly followed. In addition, turnover in job functions without properly documented procedures resulted in the School Board not maintaining the records needed to evidence compliance with suspension and debarment requirements. Effect: Without proper internal controls over procurement to sole source or professional service vendors or suspension and debarment regulations, the School Board may enter into contracts with vendors where the price may not be fair or reasonable or disallowed if the vendor has been suspended or debarred from doing business with the federal government. Recommendations: The School Board should strengthen controls at the program administration level to ensure appropriate consideration to competitors are given and adequate documentation is obtained with respect to procurement of professional services and sole source products in accordance with the Uniform Guidance 2 CFR section 200.320(f). In addition, all vendors paid with federal resources should be checked for suspension or debarment. This documentation should be approved by the program director, as well as the purchasing director, and retained as evidence of the internal controls over procurement and suspension and debarment. View of Responsible Official: Management concurs with this finding, see corrective action plan dated March 27, 2024.
2023-002: Compliance and Internal Control over Procurement - Sole Source and Suspension and Debarment Special Education Cluster Assistance Listing Numbers – 84.027A; 84.027X; 84.173A; and 87.173X Passthrough Agency: Louisiana Department of Education Questioned Costs: $84,880 Criteria: The Uniform Guidance Federal regulations per 2 CFR section 200.320 requires, among other things, that specific criteria be met for the procurement of noncompetitive proposals. Procurement of noncompetitive proposals is procurement through solicitation of a proposal from only one source, also known as a sole source vendor. This method may only be used when one or more of the following circumstances apply: • The item is available only from a single source. • The purchase is in response to a public emergency that will not permit a delay resulting from the competitive process. • The purchase is expressly authorized by awarding or pass-through agency in response to a written request from the non-Federal entity or after solicitation of a number of sources, competition is determined inadequate. To ensure compliance with these requirements, justification of the use of noncompetitive proposals and research on the availability from multiple sources must be documented. Documentation of authorization must be retained, and any initial solicitations from multiple sources which are concluded to be inadequate, and such reasoning must be documented. In addition, non-federal entities are prohibited from contracting with or making sub-awards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods or services awarded under a non-procurement transaction (e.g. a grant or cooperative agreement) that is expected to equal or exceed $25,000. Universe/Population: The total population for procurement considerations was all vendors of the Special Education Cluster whose transactions for the year ended June 30, 2023, exceeded the micro-purchase threshold of $10,000. Payroll and benefit-related transactions were excluded from the population. Based on these requirements, the population consisted of thirty-eight vendors totaling $1,729,409. There was a total of twenty-four vendors whose payments exceeded $25,000 when considering compliance with suspension and debarment regulations. Only five of the twenty-four were related to covered transactions.Condition: Five vendors with expenditures totaling $654,205 were selected for testing. We noted one of the vendors selected for testing was deemed to be a sole source provider of reading teacher support packages by the School Board totaling $84,880. A sole source letter was obtained from the vendor, which outlined the uniqueness of the goods and services to be provided. However, it was determined that School Board did not appropriately follow the process for reviewing and documentation a sole source provider, per their federal procurement policy. This is a partially repeated finding from the prior fiscal year. For the five vendors selected for testing over suspension and debarment, the School Board asserts it checked the sam.gov website and none of the vendors were suspended or debarred. Our testing confirmed that these five vendors were not suspended or debarred. However, documentary evidence that a vendor was not suspended or debarred was not maintained in the School Board’s records. Cause: The School Board did not adhere to its established procurement policy for noncompetitive proposals to sole source vendors and control and internal review process was not properly followed. In addition, turnover in job functions without properly documented procedures resulted in the School Board not maintaining the records needed to evidence compliance with suspension and debarment requirements. Effect: Without proper internal controls over procurement to sole source or professional service vendors or suspension and debarment regulations, the School Board may enter into contracts with vendors where the price may not be fair or reasonable or disallowed if the vendor has been suspended or debarred from doing business with the federal government. Recommendations: The School Board should strengthen controls at the program administration level to ensure appropriate consideration to competitors are given and adequate documentation is obtained with respect to procurement of professional services and sole source products in accordance with the Uniform Guidance 2 CFR section 200.320(f). In addition, all vendors paid with federal resources should be checked for suspension or debarment. This documentation should be approved by the program director, as well as the purchasing director, and retained as evidence of the internal controls over procurement and suspension and debarment. View of Responsible Official: Management concurs with this finding, see corrective action plan dated March 27, 2024.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. The Center has adopted a procurement policy that complies with the applicable procurement requirements. For purchases or contracts that have a value in excess of $10,000, three written proposals must be submitted to the Board of Directors. Condition: Procurement documentation for two vendors was not prepared. Context: We selected two contracts whose expenditures exceeded $10,000 noting that for these selections, the Center’s documentation supporting the procurement process was not prepared. Cause: Although the Center has established procurement policies and procedures, in one instance, there was a misunderstanding regarding the application of the procurement policy. Management believed that having the vendor explicitly specified in the approved grant application exempted the Center from following its procurement policy. In the second instance, management contracted with the service provider as an emergency procurement during the pandemic and did not revisit the procurement of this vendor. Effect: Failure to properly perform the procedures required under the procurement process could result in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the Center follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Management Response: To ensure future compliance with procurement policy the following action has/will be taken: 1. Management has developed a Service & Contract Procurement form that will be attached to purchase agreements/contracts for services that is or has the reasonable potential to meet or exceed $10,000 over the contract period. Service & Contract Procurement form contains the following information: a. Description of solicited services; b. Summary of written proposals; c. Basis for the selection of the vendor; d. If an emergency procurement for ongoing services, timeline for complete formal procurement process; and e. Date on which Board of Directors approved the service contract. 2. The entire management team received refresher training on the agency’s procurement policy on March 21, 2024; and 3. Management will solicit formal written proposals for professional accounting services by June 30, 2024.
Identification of the Federal Program: Assistance Listing Number: 93.612 Assistance Listing Title: Native Hawaiian Revolving Loan Program Federal Agency: Department of Health and Human Services Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement 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 nonprocurement transactions entered into by a recipient (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 and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System), (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). In accordance with OMB Uniform Guidance, entities under the program, including subrecipients of a state, must follow the procurement standards in 2 CFR sections § 200.318 through § 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. C.F.R. § 200.319 prescribes 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 this section and § 200.320. Further, the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period. Condition: During our audit, we noted that there was no supporting document to indicate that OHA verified the vendors in SAM to ensure that the vendors were not suspended or debarred from federally funded programs before the contract was entered into. Cause: OHA does not have policies and processes in place to check and ensure the suspension and debarment review process for vendors that provide goods or services to OHA’s programs prior to entering into a contract. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred prior to the contract being awarded, OHA could be contracting with vendors that are prohibited from working on federally funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended OHA to include SAM check in its internal control policies and procedures to incorporate the suspension and debarment verification requirements prior to awarding contracts. Views of Responsible Officials: Management concurs the finding. Refer to the separate management’s corrective action plan.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Criteria: 2 CFR 200.320 requires the non-Federal entity to have and use documented procurement procedures that are consistent with the standards outlined in that section. If small purchase procedures are used, 2 CFR 200.320(a)(2) requires price or rate quotations must be obtained from an adequate number of qualified sources. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the methods prescribed by 2 CFR 200.320(b) or (c): the sealed bid method; the competitive proposals method; or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c)). The University has adopted a Procurement Policy for Purchases Using Federal Funds that complies with the applicable procurement requirements. If purchases are over the micro-purchase threshold of $10,000, a Vendor Justification Form (VJF) must be completed and documentation maintained to support the selection of a vendor. For procurements above the micro-purchase threshold, the VJF requires a minimum of two bids; three preferred, for competitive purchase/bid procurements or documentation supporting noncompetitive purchase/bid procurements. Condition: Procurement documentation for one vendor was not prepared, failing to support compliance with the regulations above and the University’s procurement policy. Context: We selected a non-statistical sample of three procurements out of a population of fourteen vendors with total expenditures exceeding the micro-purchase threshold during the fiscal year. For one selection, the University’s VJF documenting and approving the small purchase procurement was not prepared. Cause: Despite having established procurement policies and procedures, there was a misunderstanding regarding their application in this particular instance. Management believed that having the vendor explicitly specified in the approved grant application exempted the University from following its procurement policy. Effect: Failure to properly perform the procedures required under the procurement process resulted in noncompliance with the procurement requirement. Questioned Costs: None Identification of a repeat finding: N/A. Recommendations: We recommend the University follow their procurement policies and procedures for purchases using federal funds and maintain evidence that the required procurement procedures were completed. Views of responsible officials: The HPU Office of Sponsored Projects (OSP) will strengthen its internal control to ensure that the procurement policy for purchases using federal funds is followed and that the documents required for procurement are completed and maintained, including in circumstances where the vendor was explicitly identified in an approved grant application. The Vendor Justification Form will be enforced for all purchases meeting the specific threshold amount when procuring using federal funds.
Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR 200.317 through 200.327. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. For acquisitions exceeding the simplified acquisition threshold, the non-Federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR 200.320(b); the competitive proposals method under the conditions specified in 2 CFR 200.320(b)(2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c). 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 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 180.215. During testing of federal compliance, the Center was unable to provide evidence of competitive bidding of a contract nor was a copy of the final contract maintained. Further it was noted that the Center did not check the suspended or debarred list for covered transactions. The Center should implement additional procedures to ensure competitive bidding is undertaken when required and that documentation for such processes is maintained; copies of executed contracts are maintained. Further the Center should ensure that vendors are not on the suspended or debarred list.
Non-Federal entities other than States, including those operating Federal programs as subrecipients of States, must follow the procurement standards set out at 2 CFR 200.317 through 200.327. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. For acquisitions exceeding the simplified acquisition threshold, the non-Federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR 200.320(b); the competitive proposals method under the conditions specified in 2 CFR 200.320(b)(2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c). 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 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 180.215. During testing of federal compliance, the Center was unable to provide evidence of competitive bidding of a contract nor was a copy of the final contract maintained. Further it was noted that the Center did not check the suspended or debarred list for covered transactions. The Center should implement additional procedures to ensure competitive bidding is undertaken when required and that documentation for such processes is maintained; copies of executed contracts are maintained. Further the Center should ensure that vendors are not on the suspended or debarred list.
Assistance Listings number and name: 10.691 Good Neighbor Authority Award numbers and year: 22-GN-11030400-027, January 14, 2022 through January 14, 2027 Federal agency: U.S. Department of Agriculture Compliance requirements: Procurement Questioned costs: Unknown Condition—Contrary to federal regulations and the County’s policies and procedures, the Flood Control Department (Department) failed to consider price as a selection factor when awarding a single vendor a construction services contract for which the County paid $5,896,715 during the period July 1, 2022 through June 30, 2023, which was 79.8 percent of the federal program’s expenditures. The Department evaluated the 2 bids it received but awarded the contract to the successful vendor based on its professional qualifications without considering price. Instead, the County negotiated the price of the services after the contract was awarded. Effect—There is an increased risk that the County may have overpaid for construction services, limiting the amount of federal program monies available to carry out other program objectives. Further, the Department was unable to demonstrate whether the County could have acquired these services at a lower cost. This finding could potentially affect other federal programs that the Department administers. Cause—County management reported that the Department’s program personnel misunderstood the County’s procurement policies and procedures for procuring services with federal monies, which require them to follow federal Uniform Guidance regulations and consider cost as a factor. They further explained that instead the Department followed Arizona Revised Statutes, which may be used for procuring construction contracts with State and local monies and does not use cost as a factor when selecting a vendor. Finally, the County did not have a designated person assigned to review all County procurements to verify compliance with federal regulations and the County’s policies. Criteria—Federal Uniform Guidance regulations require the County to establish and follow competitive purchasing policies and procedures that align with federal Uniform Guidance procurement standards when acquiring goods and services using federal awards (2 CFR §§200.318 through 200.327). Specifically, these regulations require that the County use a written, fixed-price contract award to the lowest responsive and responsible bidder after considering factors such as discounts, transportation costs, and life cycle costs, and only architectural/engineering services can be procured without considering price as a selection factor (2 CFR §200.320). Further, the County’s policies and procedures require that the County follow Federal Uniform Guidance procurement procedures outlined in 2 CFR §§200 when making purchases with federal monies. Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The County should: 1. Monitor departments’ adherence to the County’s policies and procedures for purchasing goods and services using federal awards, including the departments' following Uniform Guidance 2 CFR §§200 requirements to use cost as a selection factor for awarding a construction services contract. 2. Train County departments on federal Uniform Guidance requirements and the County’s procurement policies and procedures ensuring that they understand the policies and procedures to follow when acquiring goods and services using federal awards. 3. Designate an independent person who is knowledgeable about federal requirements and the County’s procurement policies and procedures to review and approve procurements involving federal awards. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Condition: During our Procurement, Suspension and Debarment test, we found 4 instances out a sample of 51 with respect to 84.425F funds and 2 cases with respect to 84.431S on which the proper purchase method was not used by the Institution. Criteria: As per regulation, non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.320 which requires recipients to Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). Cause: The Institution followed the small purchase method for these disbursements because there are very few available providers in the island that can deliver the services required and they requested quotes from all known providers, but did not followed the seal bid, competitive proposal or non-competitive proposal (if properly documented) as required by regulations. Effect: Not following established controls could result in non-compliance of federal regulations for the program. Questioned costs: -0- Since the Institution requested quotes from all know providers no cost are questioned for this finding. Recommendation: Procedures should be monitored better so that compliance with established safeguards are followed. Views of Responsible Officials and Planned Corrective Actions: Atlantic University agrees with the finding. See Corrective Action plan for the University’s Comments and plan.
Condition: During our Procurement, Suspension and Debarment test, we found 4 instances out a sample of 51 with respect to 84.425F funds and 2 cases with respect to 84.431S on which the proper purchase method was not used by the Institution. Criteria: As per regulation, non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.320 which requires recipients to Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). Cause: The Institution followed the small purchase method for these disbursements because there are very few available providers in the island that can deliver the services required and they requested quotes from all known providers, but did not followed the seal bid, competitive proposal or non-competitive proposal (if properly documented) as required by regulations. Effect: Not following established controls could result in non-compliance of federal regulations for the program. Questioned costs: -0- Since the Institution requested quotes from all know providers no cost are questioned for this finding. Recommendation: Procedures should be monitored better so that compliance with established safeguards are followed. Views of Responsible Officials and Planned Corrective Actions: Atlantic University agrees with the finding. See Corrective Action plan for the University’s Comments and plan.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues 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). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. 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 funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues 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). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. 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 funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues 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). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. 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 funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues 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). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. 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 funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues 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). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. 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 funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-Federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. Fifteen purchases that fell within the small purchases threshold were identified. Three of the purchases were selected for testing. For one of the purchases tested, totaling $55,285, the School Corporation was unable to provide supporting documentation that an adequate number of quotes were obtained from qualified sources. The lack of effective internal controls and noncompliance were isolated to the one purchase noted above. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. INDIANA STATE BOARD OF ACCOUNTS 22 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. In fiscal year 2021-2022, one covered transaction, totaling $55,285, with one vendor was identified. In 2022-2023, four covered transactions, totaling $130,257, with two vendors were identified. All five covered transactions were selected for testing. For the three vendors, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues 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). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. INDIANA STATE BOARD OF ACCOUNTS 23 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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 SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured, and vendors to whom payments equal to or in excess of $25,000 were made were not verified to be not suspended, debarred, or otherwise excluded. 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 funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 24 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-008 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027X Federal Award Number and Year (or Other Identifying Number): 22611-054-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 29 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not have a procurement policy that complied with the procurement standards. In addition, one purchase, totaling $75,387, was identified that fell within the small purchases threshold. The purchase was selected for testing. The School Corporation did not adequately document the history of the procurement, which would have included an awarded contract. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. One covered transaction, totaling $75,387, was identified and selected for testing. The School Corporation did not verify the vendor's suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The Non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 30 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (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: INDIANA STATE BOARD OF ACCOUNTS 31 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. 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 funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls and develop policies and procedures to ensure the history of the procurement is maintained for goods within the small purchase threshold and ensure contractors and subrecipients, as appropriate are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-008 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Program: COVID-19 - Special Education Grants to States Assistance Listings Number: 84.027X Federal Award Number and Year (or Other Identifying Number): 22611-054-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 29 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a non-federal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation did not have a procurement policy that complied with the procurement standards. In addition, one purchase, totaling $75,387, was identified that fell within the small purchases threshold. The purchase was selected for testing. The School Corporation did not adequately document the history of the procurement, which would have included an awarded contract. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed there were no policies or procedures in place to verify if vendors were suspended or debarred or otherwise excluded from participation in federal awards. One covered transaction, totaling $75,387, was identified and selected for testing. The School Corporation did not verify the vendor's suspension and debarment status prior to payment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The Non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 30 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (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: INDIANA STATE BOARD OF ACCOUNTS 31 WABASH CITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed and implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, goods that fell within the small purchase threshold were not properly procured and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. 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 funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls and develop policies and procedures to ensure the history of the procurement is maintained for goods within the small purchase threshold and ensure contractors and subrecipients, as appropriate are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. 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 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2021-22, SY 2022-23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of four vendors were identified for procurement that fell within the small purchases range. All four vendors were selected for testing. For three of the four vendors tested, the School Corporation could not provide evidence that price or rate quotes were obtained. In addition, the School Corporation did not obtain a contract for two of three vendors as required by Indiana Code for purchases between $50,000 and $150,000. Finally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for these vendors. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures included an appendix in the contract that a vendor will sign, stating they are not suspended or debarred or the School Corporation will check the SAMs website to ensure that the vendor is not suspended or debarred. Five covered transactions that equaled or exceeded $25,000 were identified. All five transactions, totaling $3,936,236 were selected for testing. For three of the five vendors, the School Corporation had not performed procedures to ensure the vendors, paid a total of $192,750, were not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed or implemented, which includes segregation of key functions, by management of the School Corporation to ensure that policies and procedures were in place related to procurement and suspension and debarment. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded and for small purchases an adequate number of quotes were not obtained. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services, and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. 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 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): SY 2021-22, SY 2022-23 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 18 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, informal procurement methods are permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of four vendors were identified for procurement that fell within the small purchases range. All four vendors were selected for testing. For three of the four vendors tested, the School Corporation could not provide evidence that price or rate quotes were obtained. In addition, the School Corporation did not obtain a contract for two of three vendors as required by Indiana Code for purchases between $50,000 and $150,000. Finally, documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit for these vendors. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures included an appendix in the contract that a vendor will sign, stating they are not suspended or debarred or the School Corporation will check the SAMs website to ensure that the vendor is not suspended or debarred. Five covered transactions that equaled or exceeded $25,000 were identified. All five transactions, totaling $3,936,236 were selected for testing. For three of the five vendors, the School Corporation had not performed procedures to ensure the vendors, paid a total of $192,750, were not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the Simplified Acquisition Threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." INDIANA STATE BOARD OF ACCOUNTS 20 WASHINGTON COMMUNITY SCHOOLS, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed or implemented, which includes segregation of key functions, by management of the School Corporation to ensure that policies and procedures were in place related to procurement and suspension and debarment. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded and for small purchases an adequate number of quotes were not obtained. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services, and that contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.