Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556 Pass-Through Agency: Wisconsin Department of Instruction Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement Affected: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Qualification Criteria or specific requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2). Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical. Additionally, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our testing of procurement transactions of the program we noted that the small purchases were not supported by an adequate number of quotes (at least two) to ensure the District is prudent with the monies used towards the program. In addition during our testing of suspension and debarment, we identified one vendor contract that was entered into that did not include language related to suspension and debarment. Questioned Costs: None Cause: The District did not follow their Federal Funds Procurement policy related to the appropriate methods of procurement Effect: Obtaining price quotes or proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of quotes and proposals may cause the District to over pay for supplies or services. The lack of documentation related to suspension and debarment could result in the District doing business with a suspended or debarred vendor. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the District review their policies and procedures related to Uniform Guidance and the District's Purchasing Policy. We also recommend the District evaluate current procedures and controls to ensure that policies are consistently followed and properly documented in accordance with District policies. Views of Responsible Officials and Planned Corrective Action: No disagreement with finding.
Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556 Pass-Through Agency: Wisconsin Department of Instruction Award Period: July 1, 2022 – June 30, 2023 Compliance Requirement Affected: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Qualification Criteria or specific requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2). Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from an adequate number of qualified offerors. Any response to publicized requests for proposals must be considered to the maximum extent practical. Additionally, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: During our testing of procurement transactions of the program we noted that the small purchases were not supported by an adequate number of quotes (at least two) to ensure the District is prudent with the monies used towards the program. In addition during our testing of suspension and debarment, we identified one vendor contract that was entered into that did not include language related to suspension and debarment. Questioned Costs: None Cause: The District did not follow their Federal Funds Procurement policy related to the appropriate methods of procurement Effect: Obtaining price quotes or proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of quotes and proposals may cause the District to over pay for supplies or services. The lack of documentation related to suspension and debarment could result in the District doing business with a suspended or debarred vendor. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the District review their policies and procedures related to Uniform Guidance and the District's Purchasing Policy. We also recommend the District evaluate current procedures and controls to ensure that policies are consistently followed and properly documented in accordance with District policies. Views of Responsible Officials and Planned Corrective Action: No disagreement with finding.
Criteria or specific requirement: Per Uniform Guidance 2 CFR sections 200.320 and 200.318(i); a non-federal entity must have procedures that document the rationale for the method of procurement, selection of the contract type, basis for contractor selection, and the basis for the contract price. In addition, Uniform Grant Guidance (2 CFR 20.303) requires nonfederal entities receiving Federal awards establish and maintain controls designed to reasonable ensure compliance with Federal laws, regulations, and program compliance requirements. Condition: During our testing of the procurement process, we noted that college was not in compliance with the federal procurement regulations. Questioned costs: None Context: In our sample of three procurement transactions, one transaction did not have the required procurement documentation. Cause: The College had an existing contract with a vendor and thought the transaction was covered under the original procurement. Effect: The College is not in compliance with procurement requirements to properly document the procurement rationale for the method of procurement. Repeat Finding: No Recommendation: We recommend the College revise their processes to establish procedures that will ensure procurement policies are properly followed and documented for all general disbursements paid for by federal funds. Views of responsible officials: There is no disagreement with the audit finding.
2023‐009 (2022‐005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance, Noncompliance, and Questioned Costs greater than $25k) Funding Agency: United States Department of Education Federal Award Agreement Number: N/A Award Year: 2023 Title: Education Stabilization Fund, HEERF Assistance Listing Number: 84.425C, 84.425F Pass‐through Agency: Not Applicable Pass‐through Identification Number: Not Applicable Questioned Costs: $76,109 Condition: The University did not apply the correct small purchase threshold for identifying purchases that need to obtain quotes in their policy. Population $10k‐$20k not included in small purchase policy included transactions totaling $76,109. Progress on resolution of prior year finding: No progress was made. Criteria: Per 2 CFR 200.303(a) requires non‐Federal entities to establish and maintain effective internal controls over compliance with Federal statutes, regulations, and the terms and conditions of grant agreements. 2 CFR 200.320(a) sets the micro‐purchase threshold at $10,000 and requires purchases over the micro‐purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained. Cause: Policies are not adequate to meet federal guidelines and need to be updated. Effect: The University may unintentionally use a higher‐cost vendor when failing to obtain price or rate quotations for items over the micro‐purchase threshold.
2023‐009 (2022‐005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance, Noncompliance, and Questioned Costs greater than $25k) Funding Agency: United States Department of Education Federal Award Agreement Number: N/A Award Year: 2023 Title: Education Stabilization Fund, HEERF Assistance Listing Number: 84.425C, 84.425F Pass‐through Agency: Not Applicable Pass‐through Identification Number: Not Applicable Questioned Costs: $76,109 Condition: The University did not apply the correct small purchase threshold for identifying purchases that need to obtain quotes in their policy. Population $10k‐$20k not included in small purchase policy included transactions totaling $76,109. Progress on resolution of prior year finding: No progress was made. Criteria: Per 2 CFR 200.303(a) requires non‐Federal entities to establish and maintain effective internal controls over compliance with Federal statutes, regulations, and the terms and conditions of grant agreements. 2 CFR 200.320(a) sets the micro‐purchase threshold at $10,000 and requires purchases over the micro‐purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained. Cause: Policies are not adequate to meet federal guidelines and need to be updated. Effect: The University may unintentionally use a higher‐cost vendor when failing to obtain price or rate quotations for items over the micro‐purchase threshold.
2023‐009 (2022‐005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance, Noncompliance, and Questioned Costs greater than $25k) Funding Agency: United States Department of Education Federal Award Agreement Number: N/A Award Year: 2023 Title: Education Stabilization Fund, HEERF Assistance Listing Number: 84.425C, 84.425F Pass‐through Agency: Not Applicable Pass‐through Identification Number: Not Applicable Questioned Costs: $76,109 Condition: The University did not apply the correct small purchase threshold for identifying purchases that need to obtain quotes in their policy. Population $10k‐$20k not included in small purchase policy included transactions totaling $76,109. Progress on resolution of prior year finding: No progress was made. Criteria: Per 2 CFR 200.303(a) requires non‐Federal entities to establish and maintain effective internal controls over compliance with Federal statutes, regulations, and the terms and conditions of grant agreements. 2 CFR 200.320(a) sets the micro‐purchase threshold at $10,000 and requires purchases over the micro‐purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained. Cause: Policies are not adequate to meet federal guidelines and need to be updated. Effect: The University may unintentionally use a higher‐cost vendor when failing to obtain price or rate quotations for items over the micro‐purchase threshold.
Finding 2023-001 - Procurement Federal Agency: U.S. Department of Agriculture Pass-through Agency: Pennsylvania Department of Education Assistance Listing Number: Child Nutrition Cluster – 10.553/10.555 Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was an isolated instance within the scope of the tested population. Identification of Repeat Finding: Yes Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The finding was initially identified during the conduct of the audit of the fiscal year ended June 30, 2022, which occurred in October 2022. The District was not able to remedy this finding for the fiscal year ended June 30, 2023 as the contract that the District had with the vendor was for multiple years. The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Finding 2023-001 - Procurement Federal Agency: U.S. Department of Agriculture Pass-through Agency: Pennsylvania Department of Education Assistance Listing Number: Child Nutrition Cluster – 10.553/10.555 Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was an isolated instance within the scope of the tested population. Identification of Repeat Finding: Yes Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The finding was initially identified during the conduct of the audit of the fiscal year ended June 30, 2022, which occurred in October 2022. The District was not able to remedy this finding for the fiscal year ended June 30, 2023 as the contract that the District had with the vendor was for multiple years. The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Finding 2023-001 - Procurement Federal Agency: U.S. Department of Agriculture Pass-through Agency: Pennsylvania Department of Education Assistance Listing Number: Child Nutrition Cluster – 10.553/10.555 Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was an isolated instance within the scope of the tested population. Identification of Repeat Finding: Yes Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The finding was initially identified during the conduct of the audit of the fiscal year ended June 30, 2022, which occurred in October 2022. The District was not able to remedy this finding for the fiscal year ended June 30, 2023 as the contract that the District had with the vendor was for multiple years. The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Finding 2023-001 - Procurement Federal Agency: U.S. Department of Agriculture Pass-through Agency: Pennsylvania Department of Education Assistance Listing Number: Child Nutrition Cluster – 10.553/10.555 Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was an isolated instance within the scope of the tested population. Identification of Repeat Finding: Yes Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The finding was initially identified during the conduct of the audit of the fiscal year ended June 30, 2022, which occurred in October 2022. The District was not able to remedy this finding for the fiscal year ended June 30, 2023 as the contract that the District had with the vendor was for multiple years. The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Finding 2023-001 - Procurement Federal Agency: U.S. Department of Agriculture Pass-through Agency: Pennsylvania Department of Education Assistance Listing Number: Child Nutrition Cluster – 10.553/10.555 Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Additionally, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Furthermore, the District must adhere to the Pennsylvania Public School Code 24 P.S. 1-10, 7-751 and 8-807.1 when procuring goods and services to remain in compliance with commonwealth procurement requirements. Condition: The District did not follow the appropriate procedures to comply with the procurement requirements as established by Uniform Guidance and Pennsylvania Public School Code. Cause and Effect: The District has utilized the same vendor for several years without obtaining annual bids. It did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Guidance and Pennsylvania Public School Code. Questioned Cost: None Context: During testing, it was noted that the District had purchased bakery items from a vendor without following its procurement policy. This was an isolated instance within the scope of the tested population. Identification of Repeat Finding: Yes Recommendation: We recommend that the District ensure it complies with its written procurement policy. The District should document its process and how it complies with the procurement standards. Views of Responsible Officials: The finding was initially identified during the conduct of the audit of the fiscal year ended June 30, 2022, which occurred in October 2022. The District was not able to remedy this finding for the fiscal year ended June 30, 2023 as the contract that the District had with the vendor was for multiple years. The District will establish processes to ensure that the procurement policy is followed when applicable and necessary.
Education Stabilization Fund – AL #84.425, Year Ended June 30, 2023 U.S. Department of Education Pass-Through Entity – Pennsylvania Department of Education Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Furthermore, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. During testing, it was noted that the District made procurements through sole source arrangements. Consistent with 2 CFR § 200.320(c)(3), an LEA may determine that its response to the COVID-19 pandemic qualifies as a public exigency or emergency that does not permit the delay that would result from competitive bidding. Under these circumstances, and to the degree doing so is consistent with its own policies and procedures, an LEA could use noncompetitive procurement. The LEA should consult with its SEA before using this authority. Subsequently, the District paid for this purchase utilizing the Education Stabilization Fund. In using federal funds to pay for these items, the District inadvertently did not follow its procurement policy. Cause and Effect: When the District initially made the purchases, they did not follow the more stringent requirements imposed by Uniform Guidance. The District did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Grant Guidance. Identification of Repeat Finding: Yes, #2022-003 Questioned Costs: None Recommendation: We recommend that when the District decides to utilize cooperative purchasing programs or sole source arrangements and use federal funds to pay for those purchases they ensure that they comply with their procurement policy. The District should then document its process and how it complies with the procurement standards and keep such documentation with Federal Award budget/procurement documents. Management Response: See Corrective Action Plan on pages 84 - 85.
Education Stabilization Fund – AL #84.425, Year Ended June 30, 2023 U.S. Department of Education Pass-Through Entity – Pennsylvania Department of Education Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Furthermore, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. During testing, it was noted that the District made procurements through sole source arrangements. Consistent with 2 CFR § 200.320(c)(3), an LEA may determine that its response to the COVID-19 pandemic qualifies as a public exigency or emergency that does not permit the delay that would result from competitive bidding. Under these circumstances, and to the degree doing so is consistent with its own policies and procedures, an LEA could use noncompetitive procurement. The LEA should consult with its SEA before using this authority. Subsequently, the District paid for this purchase utilizing the Education Stabilization Fund. In using federal funds to pay for these items, the District inadvertently did not follow its procurement policy. Cause and Effect: When the District initially made the purchases, they did not follow the more stringent requirements imposed by Uniform Guidance. The District did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Grant Guidance. Identification of Repeat Finding: Yes, #2022-003 Questioned Costs: None Recommendation: We recommend that when the District decides to utilize cooperative purchasing programs or sole source arrangements and use federal funds to pay for those purchases they ensure that they comply with their procurement policy. The District should then document its process and how it complies with the procurement standards and keep such documentation with Federal Award budget/procurement documents. Management Response: See Corrective Action Plan on pages 84 - 85.
Education Stabilization Fund – AL #84.425, Year Ended June 30, 2023 U.S. Department of Education Pass-Through Entity – Pennsylvania Department of Education Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Furthermore, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. During testing, it was noted that the District made procurements through sole source arrangements. Consistent with 2 CFR § 200.320(c)(3), an LEA may determine that its response to the COVID-19 pandemic qualifies as a public exigency or emergency that does not permit the delay that would result from competitive bidding. Under these circumstances, and to the degree doing so is consistent with its own policies and procedures, an LEA could use noncompetitive procurement. The LEA should consult with its SEA before using this authority. Subsequently, the District paid for this purchase utilizing the Education Stabilization Fund. In using federal funds to pay for these items, the District inadvertently did not follow its procurement policy. Cause and Effect: When the District initially made the purchases, they did not follow the more stringent requirements imposed by Uniform Guidance. The District did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Grant Guidance. Identification of Repeat Finding: Yes, #2022-003 Questioned Costs: None Recommendation: We recommend that when the District decides to utilize cooperative purchasing programs or sole source arrangements and use federal funds to pay for those purchases they ensure that they comply with their procurement policy. The District should then document its process and how it complies with the procurement standards and keep such documentation with Federal Award budget/procurement documents. Management Response: See Corrective Action Plan on pages 84 - 85.
Education Stabilization Fund – AL #84.425, Year Ended June 30, 2023 U.S. Department of Education Pass-Through Entity – Pennsylvania Department of Education Criteria: The Uniform Guidance requires that non-federal entities must have and use documented procurement procedures consistent with laws and regulations and the standards for the acquisition of property or services under a federal award or subaward in accordance with 2 CFR 200.318. Furthermore, the non-federal entity is required to follow formal procurement methods when the value of the procurement for property or service under a federal financial assistance award exceeds the simplified acquisition threshold in accordance with 2 CFR 200.320. Condition: The District did not follow the appropriate procedures to comply with Uniform Grant Guidance. During testing, it was noted that the District made procurements through sole source arrangements. Consistent with 2 CFR § 200.320(c)(3), an LEA may determine that its response to the COVID-19 pandemic qualifies as a public exigency or emergency that does not permit the delay that would result from competitive bidding. Under these circumstances, and to the degree doing so is consistent with its own policies and procedures, an LEA could use noncompetitive procurement. The LEA should consult with its SEA before using this authority. Subsequently, the District paid for this purchase utilizing the Education Stabilization Fund. In using federal funds to pay for these items, the District inadvertently did not follow its procurement policy. Cause and Effect: When the District initially made the purchases, they did not follow the more stringent requirements imposed by Uniform Guidance. The District did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Grant Guidance. Identification of Repeat Finding: Yes, #2022-003 Questioned Costs: None Recommendation: We recommend that when the District decides to utilize cooperative purchasing programs or sole source arrangements and use federal funds to pay for those purchases they ensure that they comply with their procurement policy. The District should then document its process and how it complies with the procurement standards and keep such documentation with Federal Award budget/procurement documents. Management Response: See Corrective Action Plan on pages 84 - 85.
Identification of Federal Program 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria 2 CFR 200.320 Methods of procurement to be followed. 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 formal methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.320(b) Formal procurement methods. When the value of the procurement for property or services exceeds the simplified acquisition thresholf, formal procurement methods are required. Formal procurement methods require either sealed bids to be publicly solicited or requests for proposal publicized. Non-competitive procurement are only allowed if the purchase is under the micro-purchase threshold, if the item is only available from a single source, if public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation, if the Federal awarding agency or pass through agency expressly authorizes a non-competitive procurement, or if after solicitiation of a number of sources, competition is deemed inadequate. Condition The County did not follow formal procurement procedures related to the purchase of jail camera system. Cause The County followed its internal procurement policies which are less restrictive than formal procurement processes as required under 2 CFR 200.320. Potential Effect Open competition was not insured. Questioned Costs None Context The County followed their modified procurement procedure (PPCO 15.140(1) which allows for direct solicitation of bids from vendors that work with existing technology infrastructure already in place in the County in an effort to reduce cost and waste. As a result, formal procurement processes as required were not followed. Identification of a repeat finding, if applicable This is a new finding for the County Recommendations Formal procurement processes should be followed for all Federal award purchases that exceed the simplified acquisition threshold. Views of Responsible Officials The County agrees with the finding and will develop a corrective action plan.
Identification of Federal Program 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria 2 CFR 200.320 Methods of procurement to be followed. 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 formal methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. 2 CFR 200.320(b) Formal procurement methods. When the value of the procurement for property or services exceeds the simplified acquisition thresholf, formal procurement methods are required. Formal procurement methods require either sealed bids to be publicly solicited or requests for proposal publicized. Non-competitive procurement are only allowed if the purchase is under the micro-purchase threshold, if the item is only available from a single source, if public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation, if the Federal awarding agency or pass through agency expressly authorizes a non-competitive procurement, or if after solicitiation of a number of sources, competition is deemed inadequate. Condition The County did not follow formal procurement procedures related to the purchase of jail camera system. Cause The County followed its internal procurement policies which are less restrictive than formal procurement processes as required under 2 CFR 200.320. Potential Effect Open competition was not insured. Questioned Costs None Context The County followed their modified procurement procedure (PPCO 15.140(1) which allows for direct solicitation of bids from vendors that work with existing technology infrastructure already in place in the County in an effort to reduce cost and waste. As a result, formal procurement processes as required were not followed. Identification of a repeat finding, if applicable This is a new finding for the County Recommendations Formal procurement processes should be followed for all Federal award purchases that exceed the simplified acquisition threshold. Views of Responsible Officials The County agrees with the finding and will develop a corrective action plan.
Criteria – Under Title 2 U.S. Code of Federal Regulations Part 200.319 “All procurement transaction for the acquisition of property or services required under a Federal awards must be conducted in a manner providing full and open competition consistent with eh standards of this section and 200.320” Also, as required by federal regulations in 2 CFR 200.320 and 2 CFR 200.213 “EPLS (excluded parties list system) review of vendors proposing on a federal project is requested at the time of receipt of proposal through the Federal Awarding Agency Contracting Department.” Condition/Context – For the one new vendor contract entered into during the fiscal year, the County did not follow federal procurement standards. A formal procurement method such as sealed bids, proposals or noncompetitive procurement was not performed and there was no evidence that the County verified the vendor was not suspended or debarred per the federal EPLS prior to entering the contract. We verified that the vendor was not suspended or debarred during the fiscal year 2023. Cause – The individuals overseeing contract procurement applied the normal state level requirements and was not aware the additional federal level requirements applicable due to the grant funds coming from a federal source. Effect – Without following the proper federal policies, the County may be entering into transactions with vendors that have been suspended or debarred. Repeated Finding – This is not a repeated finding. Recommendation – We recommend the County assigns a knowledgeable individual with proper training and skill to complete the procurement process and update policies and procedures for federal awards to ensure that the vendors are checked before entering into a contract. Management’s Response – We concur with the finding. Historically, the procurement process is handled at the department level and departments are expected to understand and comply with the requirements related to the funding source(s) used to procure goods and services. The Health and Human Services department followed our County procurement policy and solicited input from the State, the agency that passes WIC monies to the County, on suggestions for procuring dietitian/nutritionist services. While County policy was followed and input from the State was provided, documentation to support the procurement method used did not illustrate compliance with federal procurement standards and the service provider’s suspension and debarment status was not verified prior to entering into a contract. To mitigate this issue in the future, County Counsel reminded departments of the importance of understanding the requirements tied to the source being used to procure goods and services and to notify Counsel when federal monies are being used. Furthermore, County Counsel will include the suspension and debarment clause in the County’s standard contract templates, and the County Purchasing Policy (4-03) will be updated to reflect the importance of complying with requirements tied to a specific funding source. Lastly, County Counsel and Internal Audit will develop and provide training to departments.
Procurement and Suspension and Debarment Award Information: Grantor: U.S. Department of Transportation Assistance Listing Number: 20.509, Formula Grants for Rural Areas and Tribal Transit Program. Criteria Non-federal entities other than states, including those operating federal programs as sub-recipients of states, must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented 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. This includes meeting the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors and maintaining records to document history of procurements. This also includes conducting procurement transactions in a manner providing full and open competition in accordance with 2 CFR section 200.319 including the use of micro-purchases and small purchase methods for procurements that meet the applicable criteria under 2 CFR section 200.320. Condition The District does not have documented procurement procedures in accordance with the procurement standards set out at 2 CFR sections 200.318 through 200.326. Cause Previous management did not implement and previous District policies did not include documentation of procurement procedures in accordance with federal standards. New management is in place and have commenced an ongoing project to summarize accounting related activities into an accounting procedures manual, this includes the required procurement procedures. Effect The District does not have documented procurement procedures as required by federal standards. Not having the required procurement procedures in place could lead to awarding contracts and making purchases without adequate competition. Questioned Costs No questioned costs. Recommendation We recommend that the District formally document a procurement policy in accordance with federal standards to include all general requirements such as oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, maintaining records to document history of procurements and conducting procurement transactions in a manner providing full and open competition. Management Response and Planned Corrective Action Following these findings are management’s view and corrective action plan.
Procurement and Suspension and Debarment Award Information: Grantor: U.S. Department of Transportation Assistance Listing Number: 20.509, Formula Grants for Rural Areas and Tribal Transit Program. Criteria Non-federal entities other than states, including those operating federal programs as sub-recipients of states, must follow procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented 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. This includes meeting the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors and maintaining records to document history of procurements. This also includes conducting procurement transactions in a manner providing full and open competition in accordance with 2 CFR section 200.319 including the use of micro-purchases and small purchase methods for procurements that meet the applicable criteria under 2 CFR section 200.320. Condition The District does not have documented procurement procedures in accordance with the procurement standards set out at 2 CFR sections 200.318 through 200.326. Cause Previous management did not implement and previous District policies did not include documentation of procurement procedures in accordance with federal standards. New management is in place and have commenced an ongoing project to summarize accounting related activities into an accounting procedures manual, this includes the required procurement procedures. Effect The District does not have documented procurement procedures as required by federal standards. Not having the required procurement procedures in place could lead to awarding contracts and making purchases without adequate competition. Questioned Costs No questioned costs. Recommendation We recommend that the District formally document a procurement policy in accordance with federal standards to include all general requirements such as oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, maintaining records to document history of procurements and conducting procurement transactions in a manner providing full and open competition. Management Response and Planned Corrective Action Following these findings are management’s view and corrective action plan.
2023-004 Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number: N/A Award Period: 07/01/2022 – 06/30/2023 Compliance Requirement Affected: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Qualification Condition: During our testing of procurement transactions of the program, we noted that the District was not consistently following their procurement policy, specifically related to small purchases and one project exceeding the $250,000 threshold. These purchases were not supported by an adequate number of quotes (at least two) or proposals to ensure the District is prudent with the monies used towards the program. Additionally, we noted the District does not have procedures in place for verifying that vendors are not debarred, suspended or otherwise excluded. Context: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases and one project exceeding the $250,000 threshold. In our sample of sixteen vendors subject to procurement requirements, we noted the District did not obtain and/or retain documentation for an adequate number of price quotes for two vendors. In our testing of suspension and debarment, we noted that the District did not retain documentation related to suspension and debarment for two of the three vendors that were selected for testing. Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2) and that the procurement is vendor aggregate, not single item. Proposals must be solicited from an adequate number of qualified offerors. For purchases greater than $250,000, either a sealed bid or proposal is required. Cause: The District did not follow their Federal Funds Procurement and Suspension and Debarment Policy related to appropriate methods of procurement and suspension and debarment. Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price quotes or proposals may cause the District to overpay for supplies or services. Repeat Finding: No Recommendation: We recommend the District review procedures to ensure that the District's procurement policy is consistently followed. View of Responsible Officials: There is no disagreement with this audit finding. See corrective action plan.
2023-004 Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number: N/A Award Period: 07/01/2022 – 06/30/2023 Compliance Requirement Affected: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Qualification Condition: During our testing of procurement transactions of the program, we noted that the District was not consistently following their procurement policy, specifically related to small purchases and one project exceeding the $250,000 threshold. These purchases were not supported by an adequate number of quotes (at least two) or proposals to ensure the District is prudent with the monies used towards the program. Additionally, we noted the District does not have procedures in place for verifying that vendors are not debarred, suspended or otherwise excluded. Context: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases and one project exceeding the $250,000 threshold. In our sample of sixteen vendors subject to procurement requirements, we noted the District did not obtain and/or retain documentation for an adequate number of price quotes for two vendors. In our testing of suspension and debarment, we noted that the District did not retain documentation related to suspension and debarment for two of the three vendors that were selected for testing. Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2) and that the procurement is vendor aggregate, not single item. Proposals must be solicited from an adequate number of qualified offerors. For purchases greater than $250,000, either a sealed bid or proposal is required. Cause: The District did not follow their Federal Funds Procurement and Suspension and Debarment Policy related to appropriate methods of procurement and suspension and debarment. Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price quotes or proposals may cause the District to overpay for supplies or services. Repeat Finding: No Recommendation: We recommend the District review procedures to ensure that the District's procurement policy is consistently followed. View of Responsible Officials: There is no disagreement with this audit finding. See corrective action plan.
2023-004 Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number: N/A Award Period: 07/01/2022 – 06/30/2023 Compliance Requirement Affected: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Qualification Condition: During our testing of procurement transactions of the program, we noted that the District was not consistently following their procurement policy, specifically related to small purchases and one project exceeding the $250,000 threshold. These purchases were not supported by an adequate number of quotes (at least two) or proposals to ensure the District is prudent with the monies used towards the program. Additionally, we noted the District does not have procedures in place for verifying that vendors are not debarred, suspended or otherwise excluded. Context: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases and one project exceeding the $250,000 threshold. In our sample of sixteen vendors subject to procurement requirements, we noted the District did not obtain and/or retain documentation for an adequate number of price quotes for two vendors. In our testing of suspension and debarment, we noted that the District did not retain documentation related to suspension and debarment for two of the three vendors that were selected for testing. Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2) and that the procurement is vendor aggregate, not single item. Proposals must be solicited from an adequate number of qualified offerors. For purchases greater than $250,000, either a sealed bid or proposal is required. Cause: The District did not follow their Federal Funds Procurement and Suspension and Debarment Policy related to appropriate methods of procurement and suspension and debarment. Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price quotes or proposals may cause the District to overpay for supplies or services. Repeat Finding: No Recommendation: We recommend the District review procedures to ensure that the District's procurement policy is consistently followed. View of Responsible Officials: There is no disagreement with this audit finding. See corrective action plan.
2023-004 Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number: N/A Award Period: 07/01/2022 – 06/30/2023 Compliance Requirement Affected: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Qualification Condition: During our testing of procurement transactions of the program, we noted that the District was not consistently following their procurement policy, specifically related to small purchases and one project exceeding the $250,000 threshold. These purchases were not supported by an adequate number of quotes (at least two) or proposals to ensure the District is prudent with the monies used towards the program. Additionally, we noted the District does not have procedures in place for verifying that vendors are not debarred, suspended or otherwise excluded. Context: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases and one project exceeding the $250,000 threshold. In our sample of sixteen vendors subject to procurement requirements, we noted the District did not obtain and/or retain documentation for an adequate number of price quotes for two vendors. In our testing of suspension and debarment, we noted that the District did not retain documentation related to suspension and debarment for two of the three vendors that were selected for testing. Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2) and that the procurement is vendor aggregate, not single item. Proposals must be solicited from an adequate number of qualified offerors. For purchases greater than $250,000, either a sealed bid or proposal is required. Cause: The District did not follow their Federal Funds Procurement and Suspension and Debarment Policy related to appropriate methods of procurement and suspension and debarment. Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price quotes or proposals may cause the District to overpay for supplies or services. Repeat Finding: No Recommendation: We recommend the District review procedures to ensure that the District's procurement policy is consistently followed. View of Responsible Officials: There is no disagreement with this audit finding. See corrective action plan.
2023-004 Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number: N/A Award Period: 07/01/2022 – 06/30/2023 Compliance Requirement Affected: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Qualification Condition: During our testing of procurement transactions of the program, we noted that the District was not consistently following their procurement policy, specifically related to small purchases and one project exceeding the $250,000 threshold. These purchases were not supported by an adequate number of quotes (at least two) or proposals to ensure the District is prudent with the monies used towards the program. Additionally, we noted the District does not have procedures in place for verifying that vendors are not debarred, suspended or otherwise excluded. Context: During our testing of procurement transactions of the program, we noted that the District was not consistently following the procurement policy, specifically related to small purchases and one project exceeding the $250,000 threshold. In our sample of sixteen vendors subject to procurement requirements, we noted the District did not obtain and/or retain documentation for an adequate number of price quotes for two vendors. In our testing of suspension and debarment, we noted that the District did not retain documentation related to suspension and debarment for two of the three vendors that were selected for testing. Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2) and that the procurement is vendor aggregate, not single item. Proposals must be solicited from an adequate number of qualified offerors. For purchases greater than $250,000, either a sealed bid or proposal is required. Cause: The District did not follow their Federal Funds Procurement and Suspension and Debarment Policy related to appropriate methods of procurement and suspension and debarment. Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the most fiscally responsible way. The lack of price quotes or proposals may cause the District to overpay for supplies or services. Repeat Finding: No Recommendation: We recommend the District review procedures to ensure that the District's procurement policy is consistently followed. View of Responsible Officials: There is no disagreement with this audit finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
Assistance Listing Number, Federal Agency, and Program Name 20.205, U.S. Department of Transportation, Federal Highway Administration Highway Planning and Construction Federal Award Identification Number and Year CPG222, CPG23, CPG223, MT23, OZ23, OZ22, IC22, IC23, PC23, PC22, RS23, RS22 Pass through Entity Michigan Department of Transportation Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Under Uniform Guidance 2 CFR 200.319(d), a non federal entity must have written procedures for procurement transactions. Further, under 2 CFR 200.320(c), there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micropurchase threshold; 2) The item is available only from a single source; 3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4) The federal awarding agency or pass through entity expressly authorizes a noncompetitive procurement in response to a written request from the non federal entity; or 5) After solicitation of a number of sources, competition is determined inadequate. In addition, under 2 CFR 200.318(h), the non federal entity must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. Further, the regulations under 2 CFR Part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition The Council did not have adequate controls in place to ensure compliance with the applicable procurement and suspension and debarment standards and its own internal procurement policy. Questioned Costs $125,000 Identification of How Questioned Costs Were Computed The questioned costs represent contracts entered into under noncompetitive procurement methods with opportunities for full and open competition and activity related to those contracts reported on the schedule of expenditures of federal awards for the period under audit. Context - During procurement testing, we noted two contracts over the Council's formal procurement threshold of $50,000 where the Council procured these services using noncompetitive methods. However, opportunities existed to procure services with full and open competition. Additionally, we noted six instances for which a check for suspension and debarment was not performed. The Council did perform the suspension and debarment check after we identified the noncompliance and noted that none of the six contractors were suspended or debarred; therefore, noting no questioned costs. Cause and Effect - Per review of the Council's financial management manual, we noted procurement guidelines for primary use vendors (those procured using noncompetitive methods) wer not clearly defined). Additionally, the Council's procurement guidelines are silent on services provided on an extended contract. Further, we noted a lack of controls surrounding chcks for suspension and debarment on primary use vendors. The lack of clarity within the Council's policies and procedures to align with procurement, suspension, and debarment resulted in the noncompliance. Recommendation - We recommend the Council update its policies and procedures to align with procurement, suspension, and debarment requirements under the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan - Management has revised the financial management manual with an updated procurement policy in accordance with federal regulations. The Council has developed detailed procedures and required documentation for staff to ensure compliance. Mandatory training will be provided to staff that engage in purchasing activities.
FINDING 2023-003 Subject: Child Nutrition Cluster - Procurement 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, Other Matters. Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-002. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance for small purchases. 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. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained from an adequate number of qualified sources for small purchases. The School Corporation did not obtain price or rate quotes for five of the five vendors tested. A total of $82,230 was spent with the five vendors. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria Indiana Code 4-13.6-5-2 states: "(a) Except as provided by this chapter and IC 16-33-4-10, if the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall award a contract for the project based on competitive bids. INDIANA STATE BOARD OF ACCOUNTS 21 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) If the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall develop contract documents for a public works contract and keep the contract documents on file in its offices so that they may be inspected by contractors and members of the public. . . ." 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(i) states: "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. . . ." Cause A proper system of internal controls was not designed 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. INDIANA STATE BOARD OF ACCOUNTS 22 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, procurement procedures for goods and services were not adhered to. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and adhere to procurement procedures for all purchases of goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 23
FINDING 2023-003 Subject: Child Nutrition Cluster - Procurement 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, Other Matters. Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-002. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance for small purchases. 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. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained from an adequate number of qualified sources for small purchases. The School Corporation did not obtain price or rate quotes for five of the five vendors tested. A total of $82,230 was spent with the five vendors. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria Indiana Code 4-13.6-5-2 states: "(a) Except as provided by this chapter and IC 16-33-4-10, if the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall award a contract for the project based on competitive bids. INDIANA STATE BOARD OF ACCOUNTS 21 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) If the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall develop contract documents for a public works contract and keep the contract documents on file in its offices so that they may be inspected by contractors and members of the public. . . ." 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(i) states: "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. . . ." Cause A proper system of internal controls was not designed 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. INDIANA STATE BOARD OF ACCOUNTS 22 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, procurement procedures for goods and services were not adhered to. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and adhere to procurement procedures for all purchases of goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 23
FINDING 2023-003 Subject: Child Nutrition Cluster - Procurement 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, Other Matters. Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-002. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance for small purchases. 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. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained from an adequate number of qualified sources for small purchases. The School Corporation did not obtain price or rate quotes for five of the five vendors tested. A total of $82,230 was spent with the five vendors. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria Indiana Code 4-13.6-5-2 states: "(a) Except as provided by this chapter and IC 16-33-4-10, if the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall award a contract for the project based on competitive bids. INDIANA STATE BOARD OF ACCOUNTS 21 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) If the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall develop contract documents for a public works contract and keep the contract documents on file in its offices so that they may be inspected by contractors and members of the public. . . ." 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(i) states: "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. . . ." Cause A proper system of internal controls was not designed 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. INDIANA STATE BOARD OF ACCOUNTS 22 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, procurement procedures for goods and services were not adhered to. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and adhere to procurement procedures for all purchases of goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 23
FINDING 2023-003 Subject: Child Nutrition Cluster - Procurement 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, Other Matters. Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-002. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance for small purchases. 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. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained from an adequate number of qualified sources for small purchases. The School Corporation did not obtain price or rate quotes for five of the five vendors tested. A total of $82,230 was spent with the five vendors. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria Indiana Code 4-13.6-5-2 states: "(a) Except as provided by this chapter and IC 16-33-4-10, if the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall award a contract for the project based on competitive bids. INDIANA STATE BOARD OF ACCOUNTS 21 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) If the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall develop contract documents for a public works contract and keep the contract documents on file in its offices so that they may be inspected by contractors and members of the public. . . ." 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(i) states: "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. . . ." Cause A proper system of internal controls was not designed 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. INDIANA STATE BOARD OF ACCOUNTS 22 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, procurement procedures for goods and services were not adhered to. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and adhere to procurement procedures for all purchases of goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 23
FINDING 2023-003 Subject: Child Nutrition Cluster - Procurement 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, Other Matters. Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-002. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance for small purchases. 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. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained from an adequate number of qualified sources for small purchases. The School Corporation did not obtain price or rate quotes for five of the five vendors tested. A total of $82,230 was spent with the five vendors. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria Indiana Code 4-13.6-5-2 states: "(a) Except as provided by this chapter and IC 16-33-4-10, if the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall award a contract for the project based on competitive bids. INDIANA STATE BOARD OF ACCOUNTS 21 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) If the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall develop contract documents for a public works contract and keep the contract documents on file in its offices so that they may be inspected by contractors and members of the public. . . ." 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(i) states: "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. . . ." Cause A proper system of internal controls was not designed 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. INDIANA STATE BOARD OF ACCOUNTS 22 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, procurement procedures for goods and services were not adhered to. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and adhere to procurement procedures for all purchases of goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 23
FINDING 2023-003 Subject: Child Nutrition Cluster - Procurement 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, Other Matters. Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-002. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance for small purchases. 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. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained from an adequate number of qualified sources for small purchases. The School Corporation did not obtain price or rate quotes for five of the five vendors tested. A total of $82,230 was spent with the five vendors. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria Indiana Code 4-13.6-5-2 states: "(a) Except as provided by this chapter and IC 16-33-4-10, if the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall award a contract for the project based on competitive bids. INDIANA STATE BOARD OF ACCOUNTS 21 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) If the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall develop contract documents for a public works contract and keep the contract documents on file in its offices so that they may be inspected by contractors and members of the public. . . ." 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(i) states: "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. . . ." Cause A proper system of internal controls was not designed 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. INDIANA STATE BOARD OF ACCOUNTS 22 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, procurement procedures for goods and services were not adhered to. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and adhere to procurement procedures for all purchases of goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 23
FINDING 2023-003 Subject: Child Nutrition Cluster - Procurement 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, Other Matters. Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-002. Condition and Context The School Corporation had not properly designed or implemented a system of internal controls that would likely be effective in preventing, or detecting and correcting, noncompliance for small purchases. 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. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained from an adequate number of qualified sources for small purchases. The School Corporation did not obtain price or rate quotes for five of the five vendors tested. A total of $82,230 was spent with the five vendors. Documentation detailing the history of procurement, which must include the reason for the procurement method used, was not available for audit. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria Indiana Code 4-13.6-5-2 states: "(a) Except as provided by this chapter and IC 16-33-4-10, if the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall award a contract for the project based on competitive bids. INDIANA STATE BOARD OF ACCOUNTS 21 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) If the estimated cost of a public works project is at least one hundred fifty thousand dollars ($150,000), the division shall develop contract documents for a public works contract and keep the contract documents on file in its offices so that they may be inspected by contractors and members of the public. . . ." 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(i) states: "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. . . ." Cause A proper system of internal controls was not designed 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. INDIANA STATE BOARD OF ACCOUNTS 22 GREENCASTLE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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, procurement procedures for goods and services were not adhered to. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and adhere to procurement procedures for all purchases of goods and services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 23
FINDING 2023-001 PROCUREMENT SIGNIFICANT DEFICIENCY Federal Program: Charter School Facilities Incentive Program Assistance Listing Numbers: 84.282 Criteria Per 2 CFR 200.318, “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.” Per 2 CFR 200.320(a)(2)(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.” Condition The School was unable to provide documentation to support that price comparisons were obtained from vendors for costs falling in the category of small purchases (between $10,000 and $249,999). Cause Documentation was not maintained to support that this step in the procurement process was completed. Effect Not documenting these procedures could result in the School completing procurement transactions not in compliance with Federal regulations. Recommendation We recommend the School develop procedures to ensure price comparisons are obtained and documented. Views of Responsible Officials and Planned Corrective Actions The School’s Corrective Action Plan is included on page 23.
FINDING 2023-001 PROCUREMENT SIGNIFICANT DEFICIENCY Federal Program: Charter School Facilities Incentive Program Assistance Listing Numbers: 84.282 Criteria Per 2 CFR 200.318, “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.” Per 2 CFR 200.320(a)(2)(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.” Condition The School was unable to provide documentation to support that price comparisons were obtained from vendors for costs falling in the category of small purchases (between $10,000 and $249,999). Cause Documentation was not maintained to support that this step in the procurement process was completed. Effect Not documenting these procedures could result in the School completing procurement transactions not in compliance with Federal regulations. Recommendation We recommend the School develop procedures to ensure price comparisons are obtained and documented. Views of Responsible Officials and Planned Corrective Actions The School’s Corrective Action Plan is included on page 23.
Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: Pub. L. No. 117-2 2021 Award Period: 5/10/2021 - 12/31/2026 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to § 200.320 Methods of procurement to be followed of 2 CFR Part 200, when the value of the procurement for property or services under a federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-federal entity, formal procurement methods are required. According to the City's Federal Procurement Guidance, formal procurement methods are required when goods and services are over $100,000. Condition: During our testing, we noted the City did not follow federal procurement regulation nor its federal procurement policy. Management's Progress for Repeat Findings: This is a repeated and modified finding. While the City has improved its efforts, there are still opportUJ1itiesfor improvement to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements as well as compliance with City policy. Questioned costs: Unknown Context: During our testing, we noted the following exceptions related to procurement. • For one of the five procurement transactions, the executed contract/agreement was not provided to us. • For two of the five procurement transactions, no cost analysis was provided to us. • For one of the five procurement transactions, no public notice was provided to us. Cause: The City failed to follow federal procurement regulation nor its federal procurement policy. Effect: The auditor noted instances of noncompliance. Recommendation: We recommend the City design controls to ensure compliance with federal procurement regulation and its federal procurement policy. Management Response: The City agrees with the finding. Over the past several years, the City has developed a significant number of guidance documents and trainings in the area of federal procurement. All of the guidance documents for Central Purchasing are housed in the Purchasing SharePoint site. The guidance and training have in the past been directed at the members of the Purchasing Liaison User Group, but given the continued findings, the City intends to reach out to a much broader group to ensure compliance, including Directors, Deputy Directors, and program representatives. This will be complete by June 30, 2024. Timeline and Responsible Position: June 2024 - Chief Procurement Officer
FINDING 2023-005 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): FY2022, FY2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained, or documentation to support limited procurement procedures were conducted and maintained for small purchases. 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 obtain price or rate quotes for the three vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. For the three vendors tested, totaling $149,061, an adequate number of quotes were not obtained from qualified sources nor was there any documentation detailing the history of procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. 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 had not been performed to ensure vendors were not suspended or debarred prior to entering into covered transaction. Four covered transactions that equaled or exceeded $25,000 were identified. All four transactions, totaling $320,121, were selected for testing. For the four vendors, the School Corporation had not performed procedures to ensure the vendors 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. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must 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." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non- Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM 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 proper procurement procedures are followed and that contractors are not suspended, debarred, or otherwise excluded prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 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): FY2022, FY2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained, or documentation to support limited procurement procedures were conducted and maintained for small purchases. 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 obtain price or rate quotes for the three vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. For the three vendors tested, totaling $149,061, an adequate number of quotes were not obtained from qualified sources nor was there any documentation detailing the history of procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. 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 had not been performed to ensure vendors were not suspended or debarred prior to entering into covered transaction. Four covered transactions that equaled or exceeded $25,000 were identified. All four transactions, totaling $320,121, were selected for testing. For the four vendors, the School Corporation had not performed procedures to ensure the vendors 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. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must 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." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non- Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM 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 proper procurement procedures are followed and that contractors are not suspended, debarred, or otherwise excluded prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-005 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): FY2022, FY2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Procurement The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases. There was no documented oversight, review, or approval process in place at the School Corporation to ensure proper procedures were followed and price or rate quotations were obtained, or documentation to support limited procurement procedures were conducted and maintained for small purchases. 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 obtain price or rate quotes for the three vendors tested that were less than the simplified acquisition threshold of $150,000, but exceeded the $10,000 micro-purchase threshold. For the three vendors tested, totaling $149,061, an adequate number of quotes were not obtained from qualified sources nor was there any documentation detailing the history of procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a non-procurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. 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 had not been performed to ensure vendors were not suspended or debarred prior to entering into covered transaction. Four covered transactions that equaled or exceeded $25,000 were identified. All four transactions, totaling $320,121, were selected for testing. For the four vendors, the School Corporation had not performed procedures to ensure the vendors 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. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must 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." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases - (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non- Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM 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 proper procurement procedures are followed and that contractors are not suspended, debarred, or otherwise excluded prior to entering into any covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.