Criteria or specific requirement: According to § 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.318 General procurement standards of 2 CFR Part 200, the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 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 SAT, or a lower threshold established by a nonfederal entity, formal procurement methods are required. According to § 180.300 of Subpart C - Responsibilities of Participants Regarding Transactions Doing Business With Other Persons of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. According to Section 3.4 Formal Solicitations of the County's Purchasing Policy, Purchases of goods and services with an estimated cost of $25,000 or more (including tax, installation, and freight), shall be made as the result of a Formal Solicitation process including but not limited to Invitations for Bids, Requests for Proposals, Requests for Qualifications, Requests for Information and any other formal solicitation method that can be completed within a timeframe that allows for the solicitation, evaluation and approval in accordance with this Section. Formal solicitations may be solicited through Purchasing’s web based system or as otherwise directed by the Purchasing Agent. According to Section 3.5 Exceptions to Competitive Solicitation of the County's Purchasing Policy, in certain circumstances competitive solicitations may not be the most cost-effective approach for procurement. The Board of Supervisors, County Executive, or Purchasing may waive requirements for competitive solicitations in accordance with the grounds permitted by law. Key exemption categories are identified in the Purchasing Policy. Exceptions are not intended to circumvent the competitive process and related County policies and does not eliminate the need to ensure purchases are competitively priced and the terms and conditions of the purchase are in the best interests of the County. A written determination of the basis for the exception to competitive solicitation and the reason for the selection of the particular source shall be included in Purchasing’s records. According to the County's suspension and debarment verification process, prior to entering into an applicable contract or subrecipient agreement, department will verify on SAM.gov if an entity is listed as suspended or debarred. Condition: The County did not follow federal procurement and suspension and debarment regulation nor its purchasing policy and suspension and debarment verification procedures. Questioned costs: None Context: During our testing, we noted the following matters related to procurement and suspension and debarment. Assistance Listing Number 21.027 • For one of eleven procurements, there is no written justification, documentary support, nor evidence of approval of the emergency procurement in the procurement file. Assistance Listing Number 93.323 • For one of two procurements, the County did not maintain evidence of the suspension and debarment check before entering into the covered transaction or evidence of the review and approval of the verification check. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition and other general procurement standards, as applicable. Also, noncompliance results in procurement transactions with potentially suspended or debarred entities. Repeat Finding: This audit finding was reported in the prior year in finding 2022-004. Recommendation: We recommend the County design controls to ensure compliance with federal procurement and suspension and debarment regulation and its purchasing policy and suspension and debarment verification procedures. We recommend the County develop standard justification forms with approval of the noncompetitive procurement documented on the forms and the forms maintained in the procurement file. Also, we recommend the County update its purchasing policy to ensure clear, concise, and detailed suspension and debarment verification procedures. Views of responsible officials: There is no disagreement from responsible officials
Criteria or specific requirement: According to § 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.318 General procurement standards of 2 CFR Part 200, the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 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 SAT, or a lower threshold established by a nonfederal entity, formal procurement methods are required. According to § 180.300 of Subpart C - Responsibilities of Participants Regarding Transactions Doing Business With Other Persons of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. According to Section 3.4 Formal Solicitations of the County's Purchasing Policy, Purchases of goods and services with an estimated cost of $25,000 or more (including tax, installation, and freight), shall be made as the result of a Formal Solicitation process including but not limited to Invitations for Bids, Requests for Proposals, Requests for Qualifications, Requests for Information and any other formal solicitation method that can be completed within a timeframe that allows for the solicitation, evaluation and approval in accordance with this Section. Formal solicitations may be solicited through Purchasing’s web based system or as otherwise directed by the Purchasing Agent. According to Section 3.5 Exceptions to Competitive Solicitation of the County's Purchasing Policy, in certain circumstances competitive solicitations may not be the most cost-effective approach for procurement. The Board of Supervisors, County Executive, or Purchasing may waive requirements for competitive solicitations in accordance with the grounds permitted by law. Key exemption categories are identified in the Purchasing Policy. Exceptions are not intended to circumvent the competitive process and related County policies and does not eliminate the need to ensure purchases are competitively priced and the terms and conditions of the purchase are in the best interests of the County. A written determination of the basis for the exception to competitive solicitation and the reason for the selection of the particular source shall be included in Purchasing’s records. According to the County's suspension and debarment verification process, prior to entering into an applicable contract or subrecipient agreement, department will verify on SAM.gov if an entity is listed as suspended or debarred. Condition: The County did not follow federal procurement and suspension and debarment regulation nor its purchasing policy and suspension and debarment verification procedures. Questioned costs: None Context: During our testing, we noted the following matters related to procurement and suspension and debarment. Assistance Listing Number 21.027 • For one of eleven procurements, there is no written justification, documentary support, nor evidence of approval of the emergency procurement in the procurement file. Assistance Listing Number 93.323 • For one of two procurements, the County did not maintain evidence of the suspension and debarment check before entering into the covered transaction or evidence of the review and approval of the verification check. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition and other general procurement standards, as applicable. Also, noncompliance results in procurement transactions with potentially suspended or debarred entities. Repeat Finding: This audit finding was reported in the prior year in finding 2022-004. Recommendation: We recommend the County design controls to ensure compliance with federal procurement and suspension and debarment regulation and its purchasing policy and suspension and debarment verification procedures. We recommend the County develop standard justification forms with approval of the noncompetitive procurement documented on the forms and the forms maintained in the procurement file. Also, we recommend the County update its purchasing policy to ensure clear, concise, and detailed suspension and debarment verification procedures. Views of responsible officials: There is no disagreement from responsible officials
Criteria or specific requirement: According to § 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.318 General procurement standards of 2 CFR Part 200, the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 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 SAT, or a lower threshold established by a nonfederal entity, formal procurement methods are required. According to § 180.300 of Subpart C - Responsibilities of Participants Regarding Transactions Doing Business With Other Persons of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. According to Section 3.4 Formal Solicitations of the County's Purchasing Policy, Purchases of goods and services with an estimated cost of $25,000 or more (including tax, installation, and freight), shall be made as the result of a Formal Solicitation process including but not limited to Invitations for Bids, Requests for Proposals, Requests for Qualifications, Requests for Information and any other formal solicitation method that can be completed within a timeframe that allows for the solicitation, evaluation and approval in accordance with this Section. Formal solicitations may be solicited through Purchasing’s web based system or as otherwise directed by the Purchasing Agent. According to Section 3.5 Exceptions to Competitive Solicitation of the County's Purchasing Policy, in certain circumstances competitive solicitations may not be the most cost-effective approach for procurement. The Board of Supervisors, County Executive, or Purchasing may waive requirements for competitive solicitations in accordance with the grounds permitted by law. Key exemption categories are identified in the Purchasing Policy. Exceptions are not intended to circumvent the competitive process and related County policies and does not eliminate the need to ensure purchases are competitively priced and the terms and conditions of the purchase are in the best interests of the County. A written determination of the basis for the exception to competitive solicitation and the reason for the selection of the particular source shall be included in Purchasing’s records. According to the County's suspension and debarment verification process, prior to entering into an applicable contract or subrecipient agreement, department will verify on SAM.gov if an entity is listed as suspended or debarred. Condition: The County did not follow federal procurement and suspension and debarment regulation nor its purchasing policy and suspension and debarment verification procedures. Questioned costs: None Context: During our testing, we noted the following matters related to procurement and suspension and debarment. Assistance Listing Number 21.027 • For one of eleven procurements, there is no written justification, documentary support, nor evidence of approval of the emergency procurement in the procurement file. Assistance Listing Number 93.323 • For one of two procurements, the County did not maintain evidence of the suspension and debarment check before entering into the covered transaction or evidence of the review and approval of the verification check. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition and other general procurement standards, as applicable. Also, noncompliance results in procurement transactions with potentially suspended or debarred entities. Repeat Finding: This audit finding was reported in the prior year in finding 2022-004. Recommendation: We recommend the County design controls to ensure compliance with federal procurement and suspension and debarment regulation and its purchasing policy and suspension and debarment verification procedures. We recommend the County develop standard justification forms with approval of the noncompetitive procurement documented on the forms and the forms maintained in the procurement file. Also, we recommend the County update its purchasing policy to ensure clear, concise, and detailed suspension and debarment verification procedures. Views of responsible officials: There is no disagreement from responsible officials
Criteria or specific requirement: According to § 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to § 200.318 General procurement standards of 2 CFR Part 200, the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include but are not necessarily limited to the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. 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 SAT, or a lower threshold established by a nonfederal entity, formal procurement methods are required. According to § 180.300 of Subpart C - Responsibilities of Participants Regarding Transactions Doing Business With Other Persons of 2 CFR Part 180, when you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. According to Section 3.4 Formal Solicitations of the County's Purchasing Policy, Purchases of goods and services with an estimated cost of $25,000 or more (including tax, installation, and freight), shall be made as the result of a Formal Solicitation process including but not limited to Invitations for Bids, Requests for Proposals, Requests for Qualifications, Requests for Information and any other formal solicitation method that can be completed within a timeframe that allows for the solicitation, evaluation and approval in accordance with this Section. Formal solicitations may be solicited through Purchasing’s web based system or as otherwise directed by the Purchasing Agent. According to Section 3.5 Exceptions to Competitive Solicitation of the County's Purchasing Policy, in certain circumstances competitive solicitations may not be the most cost-effective approach for procurement. The Board of Supervisors, County Executive, or Purchasing may waive requirements for competitive solicitations in accordance with the grounds permitted by law. Key exemption categories are identified in the Purchasing Policy. Exceptions are not intended to circumvent the competitive process and related County policies and does not eliminate the need to ensure purchases are competitively priced and the terms and conditions of the purchase are in the best interests of the County. A written determination of the basis for the exception to competitive solicitation and the reason for the selection of the particular source shall be included in Purchasing’s records. According to the County's suspension and debarment verification process, prior to entering into an applicable contract or subrecipient agreement, department will verify on SAM.gov if an entity is listed as suspended or debarred. Condition: The County did not follow federal procurement and suspension and debarment regulation nor its purchasing policy and suspension and debarment verification procedures. Questioned costs: None Context: During our testing, we noted the following matters related to procurement and suspension and debarment. Assistance Listing Number 21.027 • For one of eleven procurements, there is no written justification, documentary support, nor evidence of approval of the emergency procurement in the procurement file. Assistance Listing Number 93.323 • For one of two procurements, the County did not maintain evidence of the suspension and debarment check before entering into the covered transaction or evidence of the review and approval of the verification check. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in procurement transactions for the acquisition of property or services required under a federal award not conducted in a manner providing full and open competition and other general procurement standards, as applicable. Also, noncompliance results in procurement transactions with potentially suspended or debarred entities. Repeat Finding: This audit finding was reported in the prior year in finding 2022-004. Recommendation: We recommend the County design controls to ensure compliance with federal procurement and suspension and debarment regulation and its purchasing policy and suspension and debarment verification procedures. We recommend the County develop standard justification forms with approval of the noncompetitive procurement documented on the forms and the forms maintained in the procurement file. Also, we recommend the County update its purchasing policy to ensure clear, concise, and detailed suspension and debarment verification procedures. Views of responsible officials: There is no disagreement from responsible officials
Finding – Internal control deficiencies over procurement requirements Identification of the Federal Program: Assistance Listing Number and Title: 14.231, Emergency Solutions Grant Coronavirus Program Federal Grantor Name: U.S. Department of Housing and Urban Development Federal Award/Contract Number: NA Pass-through Entity Name: California Department of Housing and Community Development Pass-through Award/Contract Number: 20-ESGCV-3-00002 Compliance Requirement – Procurement and Suspension and Debarment Condition: The City did not comply with 2 CFR 200.320 or with City procurement policies. The City did not obtain quotes for vehicles purchased. Criteria: Grant recipients must comply with Uniform Guidance for procurement, specifically with 2 CFR sections 200.318 thru 200.326 including ensuring the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320(a)(1) and (2). Cause: The City did not have proper internal control over the procurement requirements of this federal program. Effect: The City is out of compliance with procurement requirements. Questioned Costs: $199,274 Context: A small purchase could have been applied as the total amount spent under the contract was more than the micro-purchase amount but less than the simplified acquisition threshold. Under small purchase procedures price or rate quotes must be obtained. Identification of a repeat finding: Not a repeat finding. Recommendation: We recommend that the City establish and maintain effective internal control ensuring an understanding of procurement compliance requirements prior to entering into contracts with vendors with the intention of using grant monies. Views of responsible officials: Management concurs with the finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Infrastructure Support Assistance Listing Number: 93.526 Federal Award Identification Number: C8ECS43959-01 Award Periods: September 15, 2021 – September 14, 2024 Criteria: 2 CFR section 200.320 outlines the acceptable methods of procurement. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require that price or rate quotations be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Furthermore, the Organization's procurement policies require the maintaining of records sufficient to detail the history of procurement including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price Condition: The organization did not maintain appropriate documentation to support the procurement method utilized for contracts selected for testing. Questioned Costs: None. Context: Three of three transactions selected for testing. Cause: The Center did not create and maintain appropriate documentation to support the method of procurement utilized. Effect: Potential noncompliance with 2 CFR section 200.320(c)(1) - (3). Repeat Finding: No. Recommendation: We recommend the Organization consistently follow its established policies and procedures related to the maintaining of necessary documentation to support the method of procurement utilized. The Organization may also consider qualifying multiple vendors for particular goods/service and then utilizing an approved vendors list. Views of Responsible Officials: There is no disagreement with the audit finding.
2023-004 - Procurement, Suspension, and Debarment – Internal Control over Procurement and Verification Against the System for Award Management (“SAM”) (Significant Deficiency) Identification of the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number(s) and Award Year: B-21-MC-06-0554 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). In accordance with OMB Uniform Guidance, entities under the program, including subrecipients of a state, must follow the procurement standards in 2 CFR sections § 200.318 through § 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. C.F.R. § 200.319 prescribes that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and § 200.320. Further, the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period. Condition: Community Development Block Grants-Entitlement Grants Cluster Based on the City’s formal purchasing policy, purchase orders are required to initiate purchases from procured vendors for transactions above $5,000. During our audit, we noted that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. Coronavirus State and Local Fiscal Recovery Funds We determined that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. During our audit, we also noted that there was no supporting document to indicate that the City verified the vendor against the SAM to ensure the vendor was not suspended or debarred from federally-funded programs before the contract was entered into. Cause: The City did not follow its policies and process in place to check and ensure the suspension and debarment review process over vendors that provides goods or services to the City’s programs was conducted prior to enter into contract. The City implemented necessary procedures to address the finding discovered during the audit for the year ended June 30,2022 prospectively, however, due to the timing of the previous audit, the City was not able to address for the year ended June 30, 2023. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-004. Recommendation: We recommended the City follow internal control policies and procedures to incorporate the suspension and debarment verification prior to awarding contracts. Views of Responsible Officials: Management concurs the finding.
2023-004 - Procurement, Suspension, and Debarment – Internal Control over Procurement and Verification Against the System for Award Management (“SAM”) (Significant Deficiency) Identification of the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number(s) and Award Year: B-21-MC-06-0554 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). In accordance with OMB Uniform Guidance, entities under the program, including subrecipients of a state, must follow the procurement standards in 2 CFR sections § 200.318 through § 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. C.F.R. § 200.319 prescribes that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and § 200.320. Further, the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period. Condition: Community Development Block Grants-Entitlement Grants Cluster Based on the City’s formal purchasing policy, purchase orders are required to initiate purchases from procured vendors for transactions above $5,000. During our audit, we noted that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. Coronavirus State and Local Fiscal Recovery Funds We determined that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. During our audit, we also noted that there was no supporting document to indicate that the City verified the vendor against the SAM to ensure the vendor was not suspended or debarred from federally-funded programs before the contract was entered into. Cause: The City did not follow its policies and process in place to check and ensure the suspension and debarment review process over vendors that provides goods or services to the City’s programs was conducted prior to enter into contract. The City implemented necessary procedures to address the finding discovered during the audit for the year ended June 30,2022 prospectively, however, due to the timing of the previous audit, the City was not able to address for the year ended June 30, 2023. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-004. Recommendation: We recommended the City follow internal control policies and procedures to incorporate the suspension and debarment verification prior to awarding contracts. Views of Responsible Officials: Management concurs the finding.
2023-004 - Procurement, Suspension, and Debarment – Internal Control over Procurement and Verification Against the System for Award Management (“SAM”) (Significant Deficiency) Identification of the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number(s) and Award Year: B-21-MC-06-0554 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury Pass-Through Entity: N/A Federal Award Number and Award Year: N/A Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Suspension and Debarment, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a nonprocurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All nonprocurement transactions entered into by a recipient (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/portal/public/SAM/ (Note: The OMB guidance at 2 CFR part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). In accordance with OMB Uniform Guidance, entities under the program, including subrecipients of a state, must follow the procurement standards in 2 CFR sections § 200.318 through § 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. C.F.R. § 200.319 prescribes that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and § 200.320. Further, the non-Federal entity must ensure that all prequalified lists of persons, firms, or products which are used in acquiring goods and services are current and include enough qualified sources to ensure maximum open and free competition. Also, the non-Federal entity must not preclude potential bidders from qualifying during the solicitation period. Condition: Community Development Block Grants-Entitlement Grants Cluster Based on the City’s formal purchasing policy, purchase orders are required to initiate purchases from procured vendors for transactions above $5,000. During our audit, we noted that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. Coronavirus State and Local Fiscal Recovery Funds We determined that seven (7) out of forty (40) samples did have purchase order approval made subsequent to invoice approval. The aforementioned circumstance suggests that the method of procurement was not in line with the City’s adopted policy established in line with the Uniform Guidance. During our audit, we also noted that there was no supporting document to indicate that the City verified the vendor against the SAM to ensure the vendor was not suspended or debarred from federally-funded programs before the contract was entered into. Cause: The City did not follow its policies and process in place to check and ensure the suspension and debarment review process over vendors that provides goods or services to the City’s programs was conducted prior to enter into contract. The City implemented necessary procedures to address the finding discovered during the audit for the year ended June 30,2022 prospectively, however, due to the timing of the previous audit, the City was not able to address for the year ended June 30, 2023. Effect or Potential Effect: Without verifying whether vendors are suspended or debarred from working on federally-funded projects prior to the contract awarded, the City could be contracting with vendors that are prohibited from working on federally funded projects. Questioned Costs: None. Context: See condition above for context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-004. Recommendation: We recommended the City follow internal control policies and procedures to incorporate the suspension and debarment verification prior to awarding contracts. Views of Responsible Officials: Management concurs the finding.
Finding 2023-002 21.027 – Coronavirus State and Local Fiscal Recovery Funds Noncompliance with Procurement, Suspension and Debarment and Material Weakness in Internal Controls Criteria: 2 CFR Part 200.320(a)(2)(i) indicates “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 County did not obtain price or rate quotations from an adequate number of qualified sources for three of four purchases tested. Cause: The County did not obtain price and rate quotes. Effect: By not obtaining price or rate quotations, the County may pay more for goods and services than is necessary. Questioned Costs: $149,370 Recommendations: The County should establish and follow procurement policies and procedures to ensure the County adheres to requirements established by the Federal Government. Views of Responsible Officials: Hood River County is currently working on several updated policies. The U.S. government requires recipients of federal grants, such as Hood River County, to adhere to specific terms and conditions. The overarching requirement Hood River County must follow is the Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, 2 CFR Part 200, referred to as Uniform Guidance. Hood River County is training personnel to be mindful of following this guidance when making purchases.
Finding 2023-002 21.027 – Coronavirus State and Local Fiscal Recovery Funds Noncompliance with Procurement, Suspension and Debarment and Material Weakness in Internal Controls Criteria: 2 CFR Part 200.320(a)(2)(i) indicates “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 County did not obtain price or rate quotations from an adequate number of qualified sources for three of four purchases tested. Cause: The County did not obtain price and rate quotes. Effect: By not obtaining price or rate quotations, the County may pay more for goods and services than is necessary. Questioned Costs: $149,370 Recommendations: The County should establish and follow procurement policies and procedures to ensure the County adheres to requirements established by the Federal Government. Views of Responsible Officials: Hood River County is currently working on several updated policies. The U.S. government requires recipients of federal grants, such as Hood River County, to adhere to specific terms and conditions. The overarching requirement Hood River County must follow is the Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, 2 CFR Part 200, referred to as Uniform Guidance. Hood River County is training personnel to be mindful of following this guidance when making purchases.
FINDING 2023-001 PROCUREMENT SIGNIFICANT DEFICIENCY Federal Program: Charter School Programs Assistance Listing Numbers: 84.282A 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). Additionally, the School’s procedures manual did not include procedures for the handling of these transactions. 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 Programs Assistance Listing Numbers: 84.282A 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). Additionally, the School’s procedures manual did not include procedures for the handling of these transactions. 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.
Education Stabilization Fund - AL #84.425, Year Ended June 30, 2023 Career and Technical Education - AL #84.048, 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 Center did not follow the appropriate procedures to comply with Uniform Grant Guidance. During testing, it was noted that the Center made procurements through noncompetitive procurement 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, the Center could use noncompetitive procurement. The Center should consult with the Pennsylvania Department of Education before using this authority. Subsequently, the Center paid for this purchase utilizing the Education Stabilization Fund and Career and Technical Education monies. In using federal funds to pay for these items, the Center inadvertently did not follow its procurement policy. Cause and Effect: When the Center initially made the purchases, they did not follow the more stringent requirements imposed by Uniform Guidance. The Center did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Grant Guidance. Identification of Repeat Finding: No Questioned Costs: None Recommendation: We recommend that when the Center decides to utilize cooperative purchasing programs or noncompetitive purchasing arrangements and use federal funds to pay for those purchases they ensure that they comply with their procurement policy. The Center 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: The Center acknowledges this finding, and has since revised its procurement process to include the requisite items as required by the US DoE (ED) Uniform Grant Guidance (UGG) in its subsequent purchases with Federal Funds. It is also noted that most if not all of these purchases were made in response to the COVID-19 Pandemic, and with delayed guidance from PA Department of Education’s Federal Programs Office. When alerted to the guidance, the Center implemented the proper procedures
Education Stabilization Fund - AL #84.425, Year Ended June 30, 2023 Career and Technical Education - AL #84.048, 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 Center did not follow the appropriate procedures to comply with Uniform Grant Guidance. During testing, it was noted that the Center made procurements through noncompetitive procurement 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, the Center could use noncompetitive procurement. The Center should consult with the Pennsylvania Department of Education before using this authority. Subsequently, the Center paid for this purchase utilizing the Education Stabilization Fund and Career and Technical Education monies. In using federal funds to pay for these items, the Center inadvertently did not follow its procurement policy. Cause and Effect: When the Center initially made the purchases, they did not follow the more stringent requirements imposed by Uniform Guidance. The Center did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Grant Guidance. Identification of Repeat Finding: No Questioned Costs: None Recommendation: We recommend that when the Center decides to utilize cooperative purchasing programs or noncompetitive purchasing arrangements and use federal funds to pay for those purchases they ensure that they comply with their procurement policy. The Center 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: The Center acknowledges this finding, and has since revised its procurement process to include the requisite items as required by the US DoE (ED) Uniform Grant Guidance (UGG) in its subsequent purchases with Federal Funds. It is also noted that most if not all of these purchases were made in response to the COVID-19 Pandemic, and with delayed guidance from PA Department of Education’s Federal Programs Office. When alerted to the guidance, the Center implemented the proper procedures
Education Stabilization Fund - AL #84.425, Year Ended June 30, 2023 Career and Technical Education - AL #84.048, 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 Center did not follow the appropriate procedures to comply with Uniform Grant Guidance. During testing, it was noted that the Center made procurements through noncompetitive procurement 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, the Center could use noncompetitive procurement. The Center should consult with the Pennsylvania Department of Education before using this authority. Subsequently, the Center paid for this purchase utilizing the Education Stabilization Fund and Career and Technical Education monies. In using federal funds to pay for these items, the Center inadvertently did not follow its procurement policy. Cause and Effect: When the Center initially made the purchases, they did not follow the more stringent requirements imposed by Uniform Guidance. The Center did not follow its procurement policy and ultimately did not comply with the standard of the Uniform Grant Guidance. Identification of Repeat Finding: No Questioned Costs: None Recommendation: We recommend that when the Center decides to utilize cooperative purchasing programs or noncompetitive purchasing arrangements and use federal funds to pay for those purchases they ensure that they comply with their procurement policy. The Center 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: The Center acknowledges this finding, and has since revised its procurement process to include the requisite items as required by the US DoE (ED) Uniform Grant Guidance (UGG) in its subsequent purchases with Federal Funds. It is also noted that most if not all of these purchases were made in response to the COVID-19 Pandemic, and with delayed guidance from PA Department of Education’s Federal Programs Office. When alerted to the guidance, the Center implemented the proper procedures
2 CFR § 400.1 gives regulatory effect for the U.S. Department of Agriculture to the OMB guidance in 2 CFR § 200. 2 CFR § 200.317 - 200.327 requires entities to use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-Federal entity must: 1. Meet the general procurement standards in 2 CFR 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. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR 200.320(a)(1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-Federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR 200.320(b); the competitive proposals method under the conditions specified in 2 CFR 200.320(b)(2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR 200.324(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR 200.324(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The School District paid more than $250,000 to Valley Wholesale during fiscal year 2023 for food products for the Child Nutrition Cluster. This amount exceeded the simplified acquisition threshold thus the District should follow a formal competitive procurement method described in 2 CFR 200.320(b). However, the School District did not follow a formal procurement method because they chose to use this local vendor (Valley Wholesale) to allow them to get their fresh produce in a timely manner to avoid food waste. The School District did not have the proper internal controls in place to ensure proper bidding procedures were followed. Failure to have the appropriate controls in place may result in vendors being used that are not providing the best possible prices. The School District should follow their established procurement policies and federal guidelines when choosing all vendors for the Child Nutrition Cluster.
2 CFR § 400.1 gives regulatory effect for the U.S. Department of Agriculture to the OMB guidance in 2 CFR § 200. 2 CFR § 200.317 - 200.327 requires entities to use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-Federal entity must: 1. Meet the general procurement standards in 2 CFR 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. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR 200.320(a)(1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-Federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR 200.320(b); the competitive proposals method under the conditions specified in 2 CFR 200.320(b)(2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR 200.324(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR 200.324(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The School District paid more than $250,000 to Valley Wholesale during fiscal year 2023 for food products for the Child Nutrition Cluster. This amount exceeded the simplified acquisition threshold thus the District should follow a formal competitive procurement method described in 2 CFR 200.320(b). However, the School District did not follow a formal procurement method because they chose to use this local vendor (Valley Wholesale) to allow them to get their fresh produce in a timely manner to avoid food waste. The School District did not have the proper internal controls in place to ensure proper bidding procedures were followed. Failure to have the appropriate controls in place may result in vendors being used that are not providing the best possible prices. The School District should follow their established procurement policies and federal guidelines when choosing all vendors for the Child Nutrition Cluster.
2 CFR § 400.1 gives regulatory effect for the U.S. Department of Agriculture to the OMB guidance in 2 CFR § 200. 2 CFR § 200.317 - 200.327 requires entities to use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-Federal entity must: 1. Meet the general procurement standards in 2 CFR 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. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR 200.320(a)(1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-Federal entity considers the price to be reasonable (2 CFR 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-Federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR 200.320(b); the competitive proposals method under the conditions specified in 2 CFR 200.320(b)(2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR 200.320(c). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR 200.324(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR 200.324(d)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR 200.326. These provisions are described in Appendix II to 2 CFR Part 200, “Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.” The School District paid more than $250,000 to Valley Wholesale during fiscal year 2023 for food products for the Child Nutrition Cluster. This amount exceeded the simplified acquisition threshold thus the District should follow a formal competitive procurement method described in 2 CFR 200.320(b). However, the School District did not follow a formal procurement method because they chose to use this local vendor (Valley Wholesale) to allow them to get their fresh produce in a timely manner to avoid food waste. The School District did not have the proper internal controls in place to ensure proper bidding procedures were followed. Failure to have the appropriate controls in place may result in vendors being used that are not providing the best possible prices. The School District should follow their established procurement policies and federal guidelines when choosing all vendors for the Child Nutrition Cluster.
U. S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553 AND 10.555 PASS-THROUGH NUMBER 2105 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001. Procurement and Suspension and Debarment Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR 200.320 establishes the methods of procurement to be followed by non-federal entities. In compliance with this regulation, Ark. Code Ann. § 6-21-304 requires solicitation of bids on the purchase of commodities with an estimated purchase price equal to or exceeding $23,100. Condition: A Procurement Review completed by the Arkansas Division of Elementary and Secondary Education, Child Nutrition Unit (DESE, CNU) reported that a purchase totaling $71,520 did not solicit bids, as required by Ark. Code Ann. § 6-21-304. Cause: Lack of internal controls and management oversight over the procurement of supplies and services. Effect or potential effect: The District expended Child Nutrition program funds of $71,250 without soliciting bids as required by state law for purchases with an estimated purchase price equal to or exceeding $23,100. Context: Review of Procurement Review completed by the DESE, CNU for the purchases in the 2022-2023 school year. Identification as a repeat finding: No Recommendation: The District should implement controls and monitor child nutrition purchases for compliance with applicable procurement requirements. Views of responsible officials: The district updated and strengthened the procurement plan to follow formal purchase procedures. The updated procurement plan was implemented on 11/14/2023.
U. S. DEPARTMENT OF AGRICULTURE PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION CHILD NUTRITION CLUSTER - AL NUMBERS 10.553 AND 10.555 PASS-THROUGH NUMBER 2105 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001. Procurement and Suspension and Debarment Criteria or specific requirement: Office of Management and Budget (OMB) 2 CFR 200.320 establishes the methods of procurement to be followed by non-federal entities. In compliance with this regulation, Ark. Code Ann. § 6-21-304 requires solicitation of bids on the purchase of commodities with an estimated purchase price equal to or exceeding $23,100. Condition: A Procurement Review completed by the Arkansas Division of Elementary and Secondary Education, Child Nutrition Unit (DESE, CNU) reported that a purchase totaling $71,520 did not solicit bids, as required by Ark. Code Ann. § 6-21-304. Cause: Lack of internal controls and management oversight over the procurement of supplies and services. Effect or potential effect: The District expended Child Nutrition program funds of $71,250 without soliciting bids as required by state law for purchases with an estimated purchase price equal to or exceeding $23,100. Context: Review of Procurement Review completed by the DESE, CNU for the purchases in the 2022-2023 school year. Identification as a repeat finding: No Recommendation: The District should implement controls and monitor child nutrition purchases for compliance with applicable procurement requirements. Views of responsible officials: The district updated and strengthened the procurement plan to follow formal purchase procedures. The updated procurement plan was implemented on 11/14/2023.
Noncompliance and Material Weakness 2 CFR § 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 2 CFR Section 200.320(b) states in part that when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. 2 CFR § 200.318(e) states to foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. 2 CFR §200.320 (a)(2) states small purchases are the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Ohio Rev. Code § 167.081, states, in part, that a regional council may enter into a unit price contract for materials, labor, services, overhead, profit, and associated expenses for the repair, enlargement, improvement, or demolition of a building or structure if the contract is awarded pursuant to a competitive bidding procedure of a county, municipal corporation, or township or a special district, school district, or other political subdivision that is a council member. A political subdivision that is a member of a regional council may participate in a contract entered into under Ohio Rev. Code § 167.081. Purchases under a contract entered into under Ohio Rev. Code § 167.081 are exempt from any competitive selection or bidding requirements otherwise required by law. The School District participated in KPC’s purchasing cooperative unit price contract with Bluegrass Recreation., for the School District's playground resurfacing project pursuant to Ohio Rev. Code § 167.081. Additionally, the District participated in The Ohio Purchasing Council’s unit price contract with Prodigy Building Solutions, LLC., for the School District's roofing, HVAC, and Lighting project, pursuant to Ohio Rev. Code § 167.081. The School District utilized ESSER grant funds for parts of these projects. The School District did not maintain documentation that KPC or Ohio Purchasing Council followed competitive bidding procedures of a council member pursuant to Ohio Revised Code § 167.081 when awarding the unit price contract to Bluegrass Recreation and Prodigy Building Solutions respectively, failing to meet the documentation requirements of 2 CFR § 200.320(b) and 2 CFR § 200.318(e) noted above. The School District also failed to obtain an adequate number of quotes from qualified sources for purchases of a van and floor scrubbers with ESSER grant funds as required by 2 CFR §200.320 (a)(2) noted above. Failure to comply with the applicable Uniform Guidance Requirements and the Ohio Revised Code could result in further citations for the School District and potential loss of grant funding. The School District should review Uniform Guidance Requirements and the Ohio Revised Code before entering any contracts that require competitive bidding. The School District should maintain appropriate documentation to evidence that compliance requirements have been met.
Noncompliance and Material Weakness 2 CFR § 3474.1 provides that the Department of Education (DOE) adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part 200. Thus, this section gives regulatory effect to the OMB guidance and supplements the guidance as needed for the DOE, except as otherwise noted in that section. 2 CFR Section 200.320(b) states in part that when the value of the procurement for property or services under a Federal financial assistance award exceeds the simplified acquisition threshold, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with § 200.319 or paragraph (c) of this section. 2 CFR § 200.318(e) states to foster greater economy and efficiency, and in accordance with efforts to promote cost-effective use of shared services across the Federal Government, the non-Federal entity is encouraged to enter into state and local intergovernmental agreements or inter-entity agreements where appropriate for procurement or use of common or shared goods and services. Competition requirements will be met with documented procurement actions using strategic sourcing, shared services, and other similar procurement arrangements. 2 CFR §200.320 (a)(2) states small purchases are the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Ohio Rev. Code § 167.081, states, in part, that a regional council may enter into a unit price contract for materials, labor, services, overhead, profit, and associated expenses for the repair, enlargement, improvement, or demolition of a building or structure if the contract is awarded pursuant to a competitive bidding procedure of a county, municipal corporation, or township or a special district, school district, or other political subdivision that is a council member. A political subdivision that is a member of a regional council may participate in a contract entered into under Ohio Rev. Code § 167.081. Purchases under a contract entered into under Ohio Rev. Code § 167.081 are exempt from any competitive selection or bidding requirements otherwise required by law. The School District participated in KPC’s purchasing cooperative unit price contract with Bluegrass Recreation., for the School District's playground resurfacing project pursuant to Ohio Rev. Code § 167.081. Additionally, the District participated in The Ohio Purchasing Council’s unit price contract with Prodigy Building Solutions, LLC., for the School District's roofing, HVAC, and Lighting project, pursuant to Ohio Rev. Code § 167.081. The School District utilized ESSER grant funds for parts of these projects. The School District did not maintain documentation that KPC or Ohio Purchasing Council followed competitive bidding procedures of a council member pursuant to Ohio Revised Code § 167.081 when awarding the unit price contract to Bluegrass Recreation and Prodigy Building Solutions respectively, failing to meet the documentation requirements of 2 CFR § 200.320(b) and 2 CFR § 200.318(e) noted above. The School District also failed to obtain an adequate number of quotes from qualified sources for purchases of a van and floor scrubbers with ESSER grant funds as required by 2 CFR §200.320 (a)(2) noted above. Failure to comply with the applicable Uniform Guidance Requirements and the Ohio Revised Code could result in further citations for the School District and potential loss of grant funding. The School District should review Uniform Guidance Requirements and the Ohio Revised Code before entering any contracts that require competitive bidding. The School District should maintain appropriate documentation to evidence that compliance requirements have been met.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Criteria or Specific Requirement – Procurement and Suspension and Debarment In accordance with 2 CFR Section 200.320, a non-federal entity must have and use documented procurement procedures consistent with the standards of Sections 200.317 - 200.320. These standards include a micro-purchase threshold of $10,000 and policies for formal procurement and non competitive procurement. Additionally, in accordance with 2 CFR Section 180.220, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition – The Institute's micro-purchase threshold of $25,000 included in the policy is in excess of 2 CFR Section 200.320, and the Institute is not eligible for the increase to the micro-purchase threshold. Formal procurement and non competitive procurement policies have been documented; however, formalized documentation supporting the Institute is in compliance with policies did not exist. Additionally, there was no suspension and debarment check completed prior to purchases made with federal funds. Questioned Costs – Total questioned costs of $45,000 were identified and represents value of equipment purchased for which the procurement process could not be supported in line with the Institute's policy and Uniform Guidance. Context – One purchase of $45,000 out of a total of three purchases totaling $152,986 subject to procurement requirements in 2023 was selected for testing. The Institute could not provide documentation supporting their purchase adhered to policies for formal procurement or non competitive procurement. Furthermore, a check of the vendor's suspension and debarment status prior to the purchase was not completed. The sample was not intended to be, and was not, a statistically valid sample. Effect – Federal funds could be used to make an unauthorized purchase including paying an entity that is suspended or debarred. Cause – The Institute's procurement policies are not in accordance with the Uniform Guidance, nor are there controls in place to ensure policies are followed, and lastly, there are no controls to ensure suspension and debarment checks are performed on vendors receiving federal funds. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that procurement policies and suspension and debarment checks on vendors are performed prior to making purchases with federal funds and are in alignment with the Uniform Guidance requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from ‘Western PA Psych Care’ totaling $26,667. CRITERIA: In accordance with Section 2 CFR 200.318(i) of the Uniform Guidance, the District must maintain records sufficient to detail the history of procurement. These records include but are not limited to the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. EFFECT: The District did not comply with Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance, and District Procurement Policy #626, regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: $26,667 CAUSE: The District has had a long-standing relationship with Western PA Psych Care and feels that this vendor best fits the needs of the District. However, the additional procedures addressed in its Procurement Policy for Federal Programs (#626) which addresses the issue of noncompetitive procurement as outlined in Section 2 CFR 200.320(c’), were inadvertently not performed. RECOMMENDATION: I recommend that for all future purchases involving noncompetitive procurement, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs (#626), and 2) Section 2 CFR 200.320(c) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
FA 2023-002 Improve Controls over Procurement Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 84.027 – Special Education Grants to States COVID-19 – 84.027 – Special Education Grants to States 84.173 – Special Education Preschool Grants COVID-19 – 84.173 – Special Education Preschool Grants Federal Award Numbers: H027A210073 (Year: 2022), H027A220073 (Year: 2023), H027X220073 (Year: 2023), H173A210081 (Year: 2022), H173A220081 (Year: 2023), H173X220081 (Year: 2023) Questioned Costs: $88,074 Repeat of Prior Year Finding: FA 2022-001 Description: A review of expenditures charged to the Special Education Cluster (Assistance Listing Numbers 84.027 and 84.173) revealed that the School District’s internal control procedures were not operating appropriately to ensure that the School District’s procurement procedures were followed. Background: The Special Education Cluster, which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was created by the Individuals with Disabilities Education Act (IDEA). Special Education Cluster funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities. Special Education Cluster funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. Special Education Cluster funds totaling $1,378,390 were expended and reported on the Madison County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. In addition, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures, consistent with State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” Furthermore, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources…” Condition: A sample of 35 procurement transactions was randomly selected for testing using a non-statistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. Though no problems were noted with the micro-purchase transactions tested, auditors encountered significant issues in testing small purchase transactions; therefore, the entire population of small purchase transactions was ultimately tested. Upon review of these transactions, it was noted that the School District could not provide evidence that an adequate number of rate or price quotations was obtained from qualified sources for eight vendors associated with small purchase expenditures. Questioned Costs: Questioned costs of $88,074 were identified for all small purchase expenditures that did not follow the School District’s procurement procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing the deficiencies with management, they stated that internal control procedures related to procurement were not being followed appropriately. In addition, management did not adequately monitor the procurement internal control procedures. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to appropriately implement procedures to address procurement compliance requirements exposes the School District to unnecessary risk of error and misuse of Federal funds. In addition, this deficiency could lead to the return of grant funds associated with unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement procedures are followed, and appropriate documentation is obtained and retained on-file. In addition, management should develop a monitoring process to ensure that these procedures are operating effectively and as designed. Views of Responsible Officials: We concur with this finding.
FA 2023-002 Improve Controls over Procurement Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 84.027 – Special Education Grants to States COVID-19 – 84.027 – Special Education Grants to States 84.173 – Special Education Preschool Grants COVID-19 – 84.173 – Special Education Preschool Grants Federal Award Numbers: H027A210073 (Year: 2022), H027A220073 (Year: 2023), H027X220073 (Year: 2023), H173A210081 (Year: 2022), H173A220081 (Year: 2023), H173X220081 (Year: 2023) Questioned Costs: $88,074 Repeat of Prior Year Finding: FA 2022-001 Description: A review of expenditures charged to the Special Education Cluster (Assistance Listing Numbers 84.027 and 84.173) revealed that the School District’s internal control procedures were not operating appropriately to ensure that the School District’s procurement procedures were followed. Background: The Special Education Cluster, which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was created by the Individuals with Disabilities Education Act (IDEA). Special Education Cluster funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities. Special Education Cluster funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. Special Education Cluster funds totaling $1,378,390 were expended and reported on the Madison County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. In addition, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures, consistent with State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” Furthermore, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources…” Condition: A sample of 35 procurement transactions was randomly selected for testing using a non-statistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. Though no problems were noted with the micro-purchase transactions tested, auditors encountered significant issues in testing small purchase transactions; therefore, the entire population of small purchase transactions was ultimately tested. Upon review of these transactions, it was noted that the School District could not provide evidence that an adequate number of rate or price quotations was obtained from qualified sources for eight vendors associated with small purchase expenditures. Questioned Costs: Questioned costs of $88,074 were identified for all small purchase expenditures that did not follow the School District’s procurement procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing the deficiencies with management, they stated that internal control procedures related to procurement were not being followed appropriately. In addition, management did not adequately monitor the procurement internal control procedures. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to appropriately implement procedures to address procurement compliance requirements exposes the School District to unnecessary risk of error and misuse of Federal funds. In addition, this deficiency could lead to the return of grant funds associated with unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement procedures are followed, and appropriate documentation is obtained and retained on-file. In addition, management should develop a monitoring process to ensure that these procedures are operating effectively and as designed. Views of Responsible Officials: We concur with this finding.
FA 2023-002 Improve Controls over Procurement Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 84.027 – Special Education Grants to States COVID-19 – 84.027 – Special Education Grants to States 84.173 – Special Education Preschool Grants COVID-19 – 84.173 – Special Education Preschool Grants Federal Award Numbers: H027A210073 (Year: 2022), H027A220073 (Year: 2023), H027X220073 (Year: 2023), H173A210081 (Year: 2022), H173A220081 (Year: 2023), H173X220081 (Year: 2023) Questioned Costs: $88,074 Repeat of Prior Year Finding: FA 2022-001 Description: A review of expenditures charged to the Special Education Cluster (Assistance Listing Numbers 84.027 and 84.173) revealed that the School District’s internal control procedures were not operating appropriately to ensure that the School District’s procurement procedures were followed. Background: The Special Education Cluster, which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was created by the Individuals with Disabilities Education Act (IDEA). Special Education Cluster funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities. Special Education Cluster funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. Special Education Cluster funds totaling $1,378,390 were expended and reported on the Madison County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. In addition, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures, consistent with State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” Furthermore, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources…” Condition: A sample of 35 procurement transactions was randomly selected for testing using a non-statistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. Though no problems were noted with the micro-purchase transactions tested, auditors encountered significant issues in testing small purchase transactions; therefore, the entire population of small purchase transactions was ultimately tested. Upon review of these transactions, it was noted that the School District could not provide evidence that an adequate number of rate or price quotations was obtained from qualified sources for eight vendors associated with small purchase expenditures. Questioned Costs: Questioned costs of $88,074 were identified for all small purchase expenditures that did not follow the School District’s procurement procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing the deficiencies with management, they stated that internal control procedures related to procurement were not being followed appropriately. In addition, management did not adequately monitor the procurement internal control procedures. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to appropriately implement procedures to address procurement compliance requirements exposes the School District to unnecessary risk of error and misuse of Federal funds. In addition, this deficiency could lead to the return of grant funds associated with unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement procedures are followed, and appropriate documentation is obtained and retained on-file. In addition, management should develop a monitoring process to ensure that these procedures are operating effectively and as designed. Views of Responsible Officials: We concur with this finding.
FA 2023-002 Improve Controls over Procurement Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 84.027 – Special Education Grants to States COVID-19 – 84.027 – Special Education Grants to States 84.173 – Special Education Preschool Grants COVID-19 – 84.173 – Special Education Preschool Grants Federal Award Numbers: H027A210073 (Year: 2022), H027A220073 (Year: 2023), H027X220073 (Year: 2023), H173A210081 (Year: 2022), H173A220081 (Year: 2023), H173X220081 (Year: 2023) Questioned Costs: $88,074 Repeat of Prior Year Finding: FA 2022-001 Description: A review of expenditures charged to the Special Education Cluster (Assistance Listing Numbers 84.027 and 84.173) revealed that the School District’s internal control procedures were not operating appropriately to ensure that the School District’s procurement procedures were followed. Background: The Special Education Cluster, which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was created by the Individuals with Disabilities Education Act (IDEA). Special Education Cluster funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities. Special Education Cluster funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. Special Education Cluster funds totaling $1,378,390 were expended and reported on the Madison County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. In addition, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures, consistent with State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” Furthermore, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources…” Condition: A sample of 35 procurement transactions was randomly selected for testing using a non-statistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. Though no problems were noted with the micro-purchase transactions tested, auditors encountered significant issues in testing small purchase transactions; therefore, the entire population of small purchase transactions was ultimately tested. Upon review of these transactions, it was noted that the School District could not provide evidence that an adequate number of rate or price quotations was obtained from qualified sources for eight vendors associated with small purchase expenditures. Questioned Costs: Questioned costs of $88,074 were identified for all small purchase expenditures that did not follow the School District’s procurement procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing the deficiencies with management, they stated that internal control procedures related to procurement were not being followed appropriately. In addition, management did not adequately monitor the procurement internal control procedures. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to appropriately implement procedures to address procurement compliance requirements exposes the School District to unnecessary risk of error and misuse of Federal funds. In addition, this deficiency could lead to the return of grant funds associated with unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement procedures are followed, and appropriate documentation is obtained and retained on-file. In addition, management should develop a monitoring process to ensure that these procedures are operating effectively and as designed. Views of Responsible Officials: We concur with this finding.
FA 2023-002 Improve Controls over Procurement Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 84.027 – Special Education Grants to States COVID-19 – 84.027 – Special Education Grants to States 84.173 – Special Education Preschool Grants COVID-19 – 84.173 – Special Education Preschool Grants Federal Award Numbers: H027A210073 (Year: 2022), H027A220073 (Year: 2023), H027X220073 (Year: 2023), H173A210081 (Year: 2022), H173A220081 (Year: 2023), H173X220081 (Year: 2023) Questioned Costs: $88,074 Repeat of Prior Year Finding: FA 2022-001 Description: A review of expenditures charged to the Special Education Cluster (Assistance Listing Numbers 84.027 and 84.173) revealed that the School District’s internal control procedures were not operating appropriately to ensure that the School District’s procurement procedures were followed. Background: The Special Education Cluster, which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was created by the Individuals with Disabilities Education Act (IDEA). Special Education Cluster funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities. Special Education Cluster funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. Special Education Cluster funds totaling $1,378,390 were expended and reported on the Madison County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. In addition, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures, consistent with State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” Furthermore, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources…” Condition: A sample of 35 procurement transactions was randomly selected for testing using a non-statistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. Though no problems were noted with the micro-purchase transactions tested, auditors encountered significant issues in testing small purchase transactions; therefore, the entire population of small purchase transactions was ultimately tested. Upon review of these transactions, it was noted that the School District could not provide evidence that an adequate number of rate or price quotations was obtained from qualified sources for eight vendors associated with small purchase expenditures. Questioned Costs: Questioned costs of $88,074 were identified for all small purchase expenditures that did not follow the School District’s procurement procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing the deficiencies with management, they stated that internal control procedures related to procurement were not being followed appropriately. In addition, management did not adequately monitor the procurement internal control procedures. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to appropriately implement procedures to address procurement compliance requirements exposes the School District to unnecessary risk of error and misuse of Federal funds. In addition, this deficiency could lead to the return of grant funds associated with unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement procedures are followed, and appropriate documentation is obtained and retained on-file. In addition, management should develop a monitoring process to ensure that these procedures are operating effectively and as designed. Views of Responsible Officials: We concur with this finding.
FA 2023-002 Improve Controls over Procurement Compliance Requirement: Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 84.027 – Special Education Grants to States COVID-19 – 84.027 – Special Education Grants to States 84.173 – Special Education Preschool Grants COVID-19 – 84.173 – Special Education Preschool Grants Federal Award Numbers: H027A210073 (Year: 2022), H027A220073 (Year: 2023), H027X220073 (Year: 2023), H173A210081 (Year: 2022), H173A220081 (Year: 2023), H173X220081 (Year: 2023) Questioned Costs: $88,074 Repeat of Prior Year Finding: FA 2022-001 Description: A review of expenditures charged to the Special Education Cluster (Assistance Listing Numbers 84.027 and 84.173) revealed that the School District’s internal control procedures were not operating appropriately to ensure that the School District’s procurement procedures were followed. Background: The Special Education Cluster, which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was created by the Individuals with Disabilities Education Act (IDEA). Special Education Cluster funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities. Special Education Cluster funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. Special Education Cluster funds totaling $1,378,390 were expended and reported on the Madison County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. In addition, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures, consistent with State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” Furthermore, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources…” Condition: A sample of 35 procurement transactions was randomly selected for testing using a non-statistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. Though no problems were noted with the micro-purchase transactions tested, auditors encountered significant issues in testing small purchase transactions; therefore, the entire population of small purchase transactions was ultimately tested. Upon review of these transactions, it was noted that the School District could not provide evidence that an adequate number of rate or price quotations was obtained from qualified sources for eight vendors associated with small purchase expenditures. Questioned Costs: Questioned costs of $88,074 were identified for all small purchase expenditures that did not follow the School District’s procurement procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing the deficiencies with management, they stated that internal control procedures related to procurement were not being followed appropriately. In addition, management did not adequately monitor the procurement internal control procedures. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to appropriately implement procedures to address procurement compliance requirements exposes the School District to unnecessary risk of error and misuse of Federal funds. In addition, this deficiency could lead to the return of grant funds associated with unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement procedures are followed, and appropriate documentation is obtained and retained on-file. In addition, management should develop a monitoring process to ensure that these procedures are operating effectively and as designed. Views of Responsible Officials: We concur with this finding.
Finding 2023-007: Procurement Federal Programs: Child Nutrition Cluster awarded by the U.S. Department of Agriculture under assistance listing numbers 10.555 – National School Lunch Program, 10.553 – School Breakfast Program, and 10.559 – Summer Food Service Program under award numbers 22N1099 (Federal Award Year 2022), 22N1199 (Federal Award Year 2022), and 23N1199 (Federal Award Year 2023). Passed through the Illinois State Board of Education under award numbers 31045046022A1, 23-4210-00, 22-4210-00, 22-4210-BT, 23-4210-SC, 23-4220-00, 22-4220-00, 23-4225-00, and 22-4225-00. Special Education Cluster (IDEA) awarded by the U.S. Department of Education under assistance listing numbers 84.173 – Special Education - Preschool Grants (includes COVID-19 funding) and 84.027 – Special Education – Grants to States (includes COVID-19 funding) under award numbers H027A210072 (Federal Award Year 2021), H027X210072 (Federal Award Year 2021), H173X210101 (Federal Award Year 2021), H027A220072 (Federal Award Year 2022), and H173A220101 (Federal Award Year 2022). Passed through the Illinois State Board of Education under award numbers 22-4998-PS, 23-4600-00, 22-4998-ID, 23-4620-00, 23-4620-EI, 23-4625-00, and 22-4625-00. Condition: The District did not maintain adequate records for procurement transactions in the IDEA and Child Nutrition Clusters. Criteria: Uniform Grant Guidance (2 CFR 200.318(i)) states procurement records must be maintained in sufficient detail to document the history of the procurement. The records must include, but are not limited to, the rationale for the method of the procurement, the selection of the vendor, and the basis for the price. Uniform Grant Guidance (2 CFR 200.320) also specifies the methods of procurement that must be used based on the dollar value of the procurement. If small purchase procedures are used, the District must obtain a sufficient number of quotes from qualified vendors. Cause: There was turnover at the department of the District responsible for ensuring procurements are made in accordance with state and federal regulations. Additionally, the District’s electronic system of record for procurement is not used consistently. Supporting documents are sometimes kept at individual departments in paper or e-mail. Questioned Cost: None, the expenditures are allowable uses of grant funds. Context: For eight of the eight vendors selected for procurement testing in the IDEA cluster, the District was unable to provide documentation prepared at the time of the procurement action that supported why the vendor was selected and why no competitive bids or quotations were obtained. Once selected for testing, the District was able to prepare memos for seven of the eight vendors supporting why the vendor was selected and that the procurement was exempt from competitive bidding or obtaining quotations from multiple vendors. For the remaining vendor, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. For one of the five vendors selected for procurement testing in the Child Nutrition Cluster, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. Recommendation: We recommend the District review its policies and procedures for purchasing goods and services to ensure procurement history is maintained to document compliance with federal regulations and that all support related to why a vendor was selected be maintained centrally. District’s Response: The District will train its employees on the documentation trail needed for procurement actions and review its policies and procedures for any needed updates. Potential Effect: Failure to fully comply with federal regulations could result in amounts being considered unallowable by granting agencies. Prior Finding Number: 2022-001
Finding 2023-007: Procurement Federal Programs: Child Nutrition Cluster awarded by the U.S. Department of Agriculture under assistance listing numbers 10.555 – National School Lunch Program, 10.553 – School Breakfast Program, and 10.559 – Summer Food Service Program under award numbers 22N1099 (Federal Award Year 2022), 22N1199 (Federal Award Year 2022), and 23N1199 (Federal Award Year 2023). Passed through the Illinois State Board of Education under award numbers 31045046022A1, 23-4210-00, 22-4210-00, 22-4210-BT, 23-4210-SC, 23-4220-00, 22-4220-00, 23-4225-00, and 22-4225-00. Special Education Cluster (IDEA) awarded by the U.S. Department of Education under assistance listing numbers 84.173 – Special Education - Preschool Grants (includes COVID-19 funding) and 84.027 – Special Education – Grants to States (includes COVID-19 funding) under award numbers H027A210072 (Federal Award Year 2021), H027X210072 (Federal Award Year 2021), H173X210101 (Federal Award Year 2021), H027A220072 (Federal Award Year 2022), and H173A220101 (Federal Award Year 2022). Passed through the Illinois State Board of Education under award numbers 22-4998-PS, 23-4600-00, 22-4998-ID, 23-4620-00, 23-4620-EI, 23-4625-00, and 22-4625-00. Condition: The District did not maintain adequate records for procurement transactions in the IDEA and Child Nutrition Clusters. Criteria: Uniform Grant Guidance (2 CFR 200.318(i)) states procurement records must be maintained in sufficient detail to document the history of the procurement. The records must include, but are not limited to, the rationale for the method of the procurement, the selection of the vendor, and the basis for the price. Uniform Grant Guidance (2 CFR 200.320) also specifies the methods of procurement that must be used based on the dollar value of the procurement. If small purchase procedures are used, the District must obtain a sufficient number of quotes from qualified vendors. Cause: There was turnover at the department of the District responsible for ensuring procurements are made in accordance with state and federal regulations. Additionally, the District’s electronic system of record for procurement is not used consistently. Supporting documents are sometimes kept at individual departments in paper or e-mail. Questioned Cost: None, the expenditures are allowable uses of grant funds. Context: For eight of the eight vendors selected for procurement testing in the IDEA cluster, the District was unable to provide documentation prepared at the time of the procurement action that supported why the vendor was selected and why no competitive bids or quotations were obtained. Once selected for testing, the District was able to prepare memos for seven of the eight vendors supporting why the vendor was selected and that the procurement was exempt from competitive bidding or obtaining quotations from multiple vendors. For the remaining vendor, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. For one of the five vendors selected for procurement testing in the Child Nutrition Cluster, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. Recommendation: We recommend the District review its policies and procedures for purchasing goods and services to ensure procurement history is maintained to document compliance with federal regulations and that all support related to why a vendor was selected be maintained centrally. District’s Response: The District will train its employees on the documentation trail needed for procurement actions and review its policies and procedures for any needed updates. Potential Effect: Failure to fully comply with federal regulations could result in amounts being considered unallowable by granting agencies. Prior Finding Number: 2022-001
Finding 2023-007: Procurement Federal Programs: Child Nutrition Cluster awarded by the U.S. Department of Agriculture under assistance listing numbers 10.555 – National School Lunch Program, 10.553 – School Breakfast Program, and 10.559 – Summer Food Service Program under award numbers 22N1099 (Federal Award Year 2022), 22N1199 (Federal Award Year 2022), and 23N1199 (Federal Award Year 2023). Passed through the Illinois State Board of Education under award numbers 31045046022A1, 23-4210-00, 22-4210-00, 22-4210-BT, 23-4210-SC, 23-4220-00, 22-4220-00, 23-4225-00, and 22-4225-00. Special Education Cluster (IDEA) awarded by the U.S. Department of Education under assistance listing numbers 84.173 – Special Education - Preschool Grants (includes COVID-19 funding) and 84.027 – Special Education – Grants to States (includes COVID-19 funding) under award numbers H027A210072 (Federal Award Year 2021), H027X210072 (Federal Award Year 2021), H173X210101 (Federal Award Year 2021), H027A220072 (Federal Award Year 2022), and H173A220101 (Federal Award Year 2022). Passed through the Illinois State Board of Education under award numbers 22-4998-PS, 23-4600-00, 22-4998-ID, 23-4620-00, 23-4620-EI, 23-4625-00, and 22-4625-00. Condition: The District did not maintain adequate records for procurement transactions in the IDEA and Child Nutrition Clusters. Criteria: Uniform Grant Guidance (2 CFR 200.318(i)) states procurement records must be maintained in sufficient detail to document the history of the procurement. The records must include, but are not limited to, the rationale for the method of the procurement, the selection of the vendor, and the basis for the price. Uniform Grant Guidance (2 CFR 200.320) also specifies the methods of procurement that must be used based on the dollar value of the procurement. If small purchase procedures are used, the District must obtain a sufficient number of quotes from qualified vendors. Cause: There was turnover at the department of the District responsible for ensuring procurements are made in accordance with state and federal regulations. Additionally, the District’s electronic system of record for procurement is not used consistently. Supporting documents are sometimes kept at individual departments in paper or e-mail. Questioned Cost: None, the expenditures are allowable uses of grant funds. Context: For eight of the eight vendors selected for procurement testing in the IDEA cluster, the District was unable to provide documentation prepared at the time of the procurement action that supported why the vendor was selected and why no competitive bids or quotations were obtained. Once selected for testing, the District was able to prepare memos for seven of the eight vendors supporting why the vendor was selected and that the procurement was exempt from competitive bidding or obtaining quotations from multiple vendors. For the remaining vendor, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. For one of the five vendors selected for procurement testing in the Child Nutrition Cluster, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. Recommendation: We recommend the District review its policies and procedures for purchasing goods and services to ensure procurement history is maintained to document compliance with federal regulations and that all support related to why a vendor was selected be maintained centrally. District’s Response: The District will train its employees on the documentation trail needed for procurement actions and review its policies and procedures for any needed updates. Potential Effect: Failure to fully comply with federal regulations could result in amounts being considered unallowable by granting agencies. Prior Finding Number: 2022-001
Finding 2023-007: Procurement Federal Programs: Child Nutrition Cluster awarded by the U.S. Department of Agriculture under assistance listing numbers 10.555 – National School Lunch Program, 10.553 – School Breakfast Program, and 10.559 – Summer Food Service Program under award numbers 22N1099 (Federal Award Year 2022), 22N1199 (Federal Award Year 2022), and 23N1199 (Federal Award Year 2023). Passed through the Illinois State Board of Education under award numbers 31045046022A1, 23-4210-00, 22-4210-00, 22-4210-BT, 23-4210-SC, 23-4220-00, 22-4220-00, 23-4225-00, and 22-4225-00. Special Education Cluster (IDEA) awarded by the U.S. Department of Education under assistance listing numbers 84.173 – Special Education - Preschool Grants (includes COVID-19 funding) and 84.027 – Special Education – Grants to States (includes COVID-19 funding) under award numbers H027A210072 (Federal Award Year 2021), H027X210072 (Federal Award Year 2021), H173X210101 (Federal Award Year 2021), H027A220072 (Federal Award Year 2022), and H173A220101 (Federal Award Year 2022). Passed through the Illinois State Board of Education under award numbers 22-4998-PS, 23-4600-00, 22-4998-ID, 23-4620-00, 23-4620-EI, 23-4625-00, and 22-4625-00. Condition: The District did not maintain adequate records for procurement transactions in the IDEA and Child Nutrition Clusters. Criteria: Uniform Grant Guidance (2 CFR 200.318(i)) states procurement records must be maintained in sufficient detail to document the history of the procurement. The records must include, but are not limited to, the rationale for the method of the procurement, the selection of the vendor, and the basis for the price. Uniform Grant Guidance (2 CFR 200.320) also specifies the methods of procurement that must be used based on the dollar value of the procurement. If small purchase procedures are used, the District must obtain a sufficient number of quotes from qualified vendors. Cause: There was turnover at the department of the District responsible for ensuring procurements are made in accordance with state and federal regulations. Additionally, the District’s electronic system of record for procurement is not used consistently. Supporting documents are sometimes kept at individual departments in paper or e-mail. Questioned Cost: None, the expenditures are allowable uses of grant funds. Context: For eight of the eight vendors selected for procurement testing in the IDEA cluster, the District was unable to provide documentation prepared at the time of the procurement action that supported why the vendor was selected and why no competitive bids or quotations were obtained. Once selected for testing, the District was able to prepare memos for seven of the eight vendors supporting why the vendor was selected and that the procurement was exempt from competitive bidding or obtaining quotations from multiple vendors. For the remaining vendor, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. For one of the five vendors selected for procurement testing in the Child Nutrition Cluster, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. Recommendation: We recommend the District review its policies and procedures for purchasing goods and services to ensure procurement history is maintained to document compliance with federal regulations and that all support related to why a vendor was selected be maintained centrally. District’s Response: The District will train its employees on the documentation trail needed for procurement actions and review its policies and procedures for any needed updates. Potential Effect: Failure to fully comply with federal regulations could result in amounts being considered unallowable by granting agencies. Prior Finding Number: 2022-001
Finding 2023-007: Procurement Federal Programs: Child Nutrition Cluster awarded by the U.S. Department of Agriculture under assistance listing numbers 10.555 – National School Lunch Program, 10.553 – School Breakfast Program, and 10.559 – Summer Food Service Program under award numbers 22N1099 (Federal Award Year 2022), 22N1199 (Federal Award Year 2022), and 23N1199 (Federal Award Year 2023). Passed through the Illinois State Board of Education under award numbers 31045046022A1, 23-4210-00, 22-4210-00, 22-4210-BT, 23-4210-SC, 23-4220-00, 22-4220-00, 23-4225-00, and 22-4225-00. Special Education Cluster (IDEA) awarded by the U.S. Department of Education under assistance listing numbers 84.173 – Special Education - Preschool Grants (includes COVID-19 funding) and 84.027 – Special Education – Grants to States (includes COVID-19 funding) under award numbers H027A210072 (Federal Award Year 2021), H027X210072 (Federal Award Year 2021), H173X210101 (Federal Award Year 2021), H027A220072 (Federal Award Year 2022), and H173A220101 (Federal Award Year 2022). Passed through the Illinois State Board of Education under award numbers 22-4998-PS, 23-4600-00, 22-4998-ID, 23-4620-00, 23-4620-EI, 23-4625-00, and 22-4625-00. Condition: The District did not maintain adequate records for procurement transactions in the IDEA and Child Nutrition Clusters. Criteria: Uniform Grant Guidance (2 CFR 200.318(i)) states procurement records must be maintained in sufficient detail to document the history of the procurement. The records must include, but are not limited to, the rationale for the method of the procurement, the selection of the vendor, and the basis for the price. Uniform Grant Guidance (2 CFR 200.320) also specifies the methods of procurement that must be used based on the dollar value of the procurement. If small purchase procedures are used, the District must obtain a sufficient number of quotes from qualified vendors. Cause: There was turnover at the department of the District responsible for ensuring procurements are made in accordance with state and federal regulations. Additionally, the District’s electronic system of record for procurement is not used consistently. Supporting documents are sometimes kept at individual departments in paper or e-mail. Questioned Cost: None, the expenditures are allowable uses of grant funds. Context: For eight of the eight vendors selected for procurement testing in the IDEA cluster, the District was unable to provide documentation prepared at the time of the procurement action that supported why the vendor was selected and why no competitive bids or quotations were obtained. Once selected for testing, the District was able to prepare memos for seven of the eight vendors supporting why the vendor was selected and that the procurement was exempt from competitive bidding or obtaining quotations from multiple vendors. For the remaining vendor, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. For one of the five vendors selected for procurement testing in the Child Nutrition Cluster, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. Recommendation: We recommend the District review its policies and procedures for purchasing goods and services to ensure procurement history is maintained to document compliance with federal regulations and that all support related to why a vendor was selected be maintained centrally. District’s Response: The District will train its employees on the documentation trail needed for procurement actions and review its policies and procedures for any needed updates. Potential Effect: Failure to fully comply with federal regulations could result in amounts being considered unallowable by granting agencies. Prior Finding Number: 2022-001
Finding 2023-007: Procurement Federal Programs: Child Nutrition Cluster awarded by the U.S. Department of Agriculture under assistance listing numbers 10.555 – National School Lunch Program, 10.553 – School Breakfast Program, and 10.559 – Summer Food Service Program under award numbers 22N1099 (Federal Award Year 2022), 22N1199 (Federal Award Year 2022), and 23N1199 (Federal Award Year 2023). Passed through the Illinois State Board of Education under award numbers 31045046022A1, 23-4210-00, 22-4210-00, 22-4210-BT, 23-4210-SC, 23-4220-00, 22-4220-00, 23-4225-00, and 22-4225-00. Special Education Cluster (IDEA) awarded by the U.S. Department of Education under assistance listing numbers 84.173 – Special Education - Preschool Grants (includes COVID-19 funding) and 84.027 – Special Education – Grants to States (includes COVID-19 funding) under award numbers H027A210072 (Federal Award Year 2021), H027X210072 (Federal Award Year 2021), H173X210101 (Federal Award Year 2021), H027A220072 (Federal Award Year 2022), and H173A220101 (Federal Award Year 2022). Passed through the Illinois State Board of Education under award numbers 22-4998-PS, 23-4600-00, 22-4998-ID, 23-4620-00, 23-4620-EI, 23-4625-00, and 22-4625-00. Condition: The District did not maintain adequate records for procurement transactions in the IDEA and Child Nutrition Clusters. Criteria: Uniform Grant Guidance (2 CFR 200.318(i)) states procurement records must be maintained in sufficient detail to document the history of the procurement. The records must include, but are not limited to, the rationale for the method of the procurement, the selection of the vendor, and the basis for the price. Uniform Grant Guidance (2 CFR 200.320) also specifies the methods of procurement that must be used based on the dollar value of the procurement. If small purchase procedures are used, the District must obtain a sufficient number of quotes from qualified vendors. Cause: There was turnover at the department of the District responsible for ensuring procurements are made in accordance with state and federal regulations. Additionally, the District’s electronic system of record for procurement is not used consistently. Supporting documents are sometimes kept at individual departments in paper or e-mail. Questioned Cost: None, the expenditures are allowable uses of grant funds. Context: For eight of the eight vendors selected for procurement testing in the IDEA cluster, the District was unable to provide documentation prepared at the time of the procurement action that supported why the vendor was selected and why no competitive bids or quotations were obtained. Once selected for testing, the District was able to prepare memos for seven of the eight vendors supporting why the vendor was selected and that the procurement was exempt from competitive bidding or obtaining quotations from multiple vendors. For the remaining vendor, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. For one of the five vendors selected for procurement testing in the Child Nutrition Cluster, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. Recommendation: We recommend the District review its policies and procedures for purchasing goods and services to ensure procurement history is maintained to document compliance with federal regulations and that all support related to why a vendor was selected be maintained centrally. District’s Response: The District will train its employees on the documentation trail needed for procurement actions and review its policies and procedures for any needed updates. Potential Effect: Failure to fully comply with federal regulations could result in amounts being considered unallowable by granting agencies. Prior Finding Number: 2022-001
Finding 2023-007: Procurement Federal Programs: Child Nutrition Cluster awarded by the U.S. Department of Agriculture under assistance listing numbers 10.555 – National School Lunch Program, 10.553 – School Breakfast Program, and 10.559 – Summer Food Service Program under award numbers 22N1099 (Federal Award Year 2022), 22N1199 (Federal Award Year 2022), and 23N1199 (Federal Award Year 2023). Passed through the Illinois State Board of Education under award numbers 31045046022A1, 23-4210-00, 22-4210-00, 22-4210-BT, 23-4210-SC, 23-4220-00, 22-4220-00, 23-4225-00, and 22-4225-00. Special Education Cluster (IDEA) awarded by the U.S. Department of Education under assistance listing numbers 84.173 – Special Education - Preschool Grants (includes COVID-19 funding) and 84.027 – Special Education – Grants to States (includes COVID-19 funding) under award numbers H027A210072 (Federal Award Year 2021), H027X210072 (Federal Award Year 2021), H173X210101 (Federal Award Year 2021), H027A220072 (Federal Award Year 2022), and H173A220101 (Federal Award Year 2022). Passed through the Illinois State Board of Education under award numbers 22-4998-PS, 23-4600-00, 22-4998-ID, 23-4620-00, 23-4620-EI, 23-4625-00, and 22-4625-00. Condition: The District did not maintain adequate records for procurement transactions in the IDEA and Child Nutrition Clusters. Criteria: Uniform Grant Guidance (2 CFR 200.318(i)) states procurement records must be maintained in sufficient detail to document the history of the procurement. The records must include, but are not limited to, the rationale for the method of the procurement, the selection of the vendor, and the basis for the price. Uniform Grant Guidance (2 CFR 200.320) also specifies the methods of procurement that must be used based on the dollar value of the procurement. If small purchase procedures are used, the District must obtain a sufficient number of quotes from qualified vendors. Cause: There was turnover at the department of the District responsible for ensuring procurements are made in accordance with state and federal regulations. Additionally, the District’s electronic system of record for procurement is not used consistently. Supporting documents are sometimes kept at individual departments in paper or e-mail. Questioned Cost: None, the expenditures are allowable uses of grant funds. Context: For eight of the eight vendors selected for procurement testing in the IDEA cluster, the District was unable to provide documentation prepared at the time of the procurement action that supported why the vendor was selected and why no competitive bids or quotations were obtained. Once selected for testing, the District was able to prepare memos for seven of the eight vendors supporting why the vendor was selected and that the procurement was exempt from competitive bidding or obtaining quotations from multiple vendors. For the remaining vendor, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. For one of the five vendors selected for procurement testing in the Child Nutrition Cluster, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. Recommendation: We recommend the District review its policies and procedures for purchasing goods and services to ensure procurement history is maintained to document compliance with federal regulations and that all support related to why a vendor was selected be maintained centrally. District’s Response: The District will train its employees on the documentation trail needed for procurement actions and review its policies and procedures for any needed updates. Potential Effect: Failure to fully comply with federal regulations could result in amounts being considered unallowable by granting agencies. Prior Finding Number: 2022-001
Finding 2023-007: Procurement Federal Programs: Child Nutrition Cluster awarded by the U.S. Department of Agriculture under assistance listing numbers 10.555 – National School Lunch Program, 10.553 – School Breakfast Program, and 10.559 – Summer Food Service Program under award numbers 22N1099 (Federal Award Year 2022), 22N1199 (Federal Award Year 2022), and 23N1199 (Federal Award Year 2023). Passed through the Illinois State Board of Education under award numbers 31045046022A1, 23-4210-00, 22-4210-00, 22-4210-BT, 23-4210-SC, 23-4220-00, 22-4220-00, 23-4225-00, and 22-4225-00. Special Education Cluster (IDEA) awarded by the U.S. Department of Education under assistance listing numbers 84.173 – Special Education - Preschool Grants (includes COVID-19 funding) and 84.027 – Special Education – Grants to States (includes COVID-19 funding) under award numbers H027A210072 (Federal Award Year 2021), H027X210072 (Federal Award Year 2021), H173X210101 (Federal Award Year 2021), H027A220072 (Federal Award Year 2022), and H173A220101 (Federal Award Year 2022). Passed through the Illinois State Board of Education under award numbers 22-4998-PS, 23-4600-00, 22-4998-ID, 23-4620-00, 23-4620-EI, 23-4625-00, and 22-4625-00. Condition: The District did not maintain adequate records for procurement transactions in the IDEA and Child Nutrition Clusters. Criteria: Uniform Grant Guidance (2 CFR 200.318(i)) states procurement records must be maintained in sufficient detail to document the history of the procurement. The records must include, but are not limited to, the rationale for the method of the procurement, the selection of the vendor, and the basis for the price. Uniform Grant Guidance (2 CFR 200.320) also specifies the methods of procurement that must be used based on the dollar value of the procurement. If small purchase procedures are used, the District must obtain a sufficient number of quotes from qualified vendors. Cause: There was turnover at the department of the District responsible for ensuring procurements are made in accordance with state and federal regulations. Additionally, the District’s electronic system of record for procurement is not used consistently. Supporting documents are sometimes kept at individual departments in paper or e-mail. Questioned Cost: None, the expenditures are allowable uses of grant funds. Context: For eight of the eight vendors selected for procurement testing in the IDEA cluster, the District was unable to provide documentation prepared at the time of the procurement action that supported why the vendor was selected and why no competitive bids or quotations were obtained. Once selected for testing, the District was able to prepare memos for seven of the eight vendors supporting why the vendor was selected and that the procurement was exempt from competitive bidding or obtaining quotations from multiple vendors. For the remaining vendor, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. For one of the five vendors selected for procurement testing in the Child Nutrition Cluster, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. Recommendation: We recommend the District review its policies and procedures for purchasing goods and services to ensure procurement history is maintained to document compliance with federal regulations and that all support related to why a vendor was selected be maintained centrally. District’s Response: The District will train its employees on the documentation trail needed for procurement actions and review its policies and procedures for any needed updates. Potential Effect: Failure to fully comply with federal regulations could result in amounts being considered unallowable by granting agencies. Prior Finding Number: 2022-001
Finding 2023-007: Procurement Federal Programs: Child Nutrition Cluster awarded by the U.S. Department of Agriculture under assistance listing numbers 10.555 – National School Lunch Program, 10.553 – School Breakfast Program, and 10.559 – Summer Food Service Program under award numbers 22N1099 (Federal Award Year 2022), 22N1199 (Federal Award Year 2022), and 23N1199 (Federal Award Year 2023). Passed through the Illinois State Board of Education under award numbers 31045046022A1, 23-4210-00, 22-4210-00, 22-4210-BT, 23-4210-SC, 23-4220-00, 22-4220-00, 23-4225-00, and 22-4225-00. Special Education Cluster (IDEA) awarded by the U.S. Department of Education under assistance listing numbers 84.173 – Special Education - Preschool Grants (includes COVID-19 funding) and 84.027 – Special Education – Grants to States (includes COVID-19 funding) under award numbers H027A210072 (Federal Award Year 2021), H027X210072 (Federal Award Year 2021), H173X210101 (Federal Award Year 2021), H027A220072 (Federal Award Year 2022), and H173A220101 (Federal Award Year 2022). Passed through the Illinois State Board of Education under award numbers 22-4998-PS, 23-4600-00, 22-4998-ID, 23-4620-00, 23-4620-EI, 23-4625-00, and 22-4625-00. Condition: The District did not maintain adequate records for procurement transactions in the IDEA and Child Nutrition Clusters. Criteria: Uniform Grant Guidance (2 CFR 200.318(i)) states procurement records must be maintained in sufficient detail to document the history of the procurement. The records must include, but are not limited to, the rationale for the method of the procurement, the selection of the vendor, and the basis for the price. Uniform Grant Guidance (2 CFR 200.320) also specifies the methods of procurement that must be used based on the dollar value of the procurement. If small purchase procedures are used, the District must obtain a sufficient number of quotes from qualified vendors. Cause: There was turnover at the department of the District responsible for ensuring procurements are made in accordance with state and federal regulations. Additionally, the District’s electronic system of record for procurement is not used consistently. Supporting documents are sometimes kept at individual departments in paper or e-mail. Questioned Cost: None, the expenditures are allowable uses of grant funds. Context: For eight of the eight vendors selected for procurement testing in the IDEA cluster, the District was unable to provide documentation prepared at the time of the procurement action that supported why the vendor was selected and why no competitive bids or quotations were obtained. Once selected for testing, the District was able to prepare memos for seven of the eight vendors supporting why the vendor was selected and that the procurement was exempt from competitive bidding or obtaining quotations from multiple vendors. For the remaining vendor, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. For one of the five vendors selected for procurement testing in the Child Nutrition Cluster, which under federal requirements would be considered a small purchase, the District was unable to determine why the vendor was selected for the procurement opportunity. Recommendation: We recommend the District review its policies and procedures for purchasing goods and services to ensure procurement history is maintained to document compliance with federal regulations and that all support related to why a vendor was selected be maintained centrally. District’s Response: The District will train its employees on the documentation trail needed for procurement actions and review its policies and procedures for any needed updates. Potential Effect: Failure to fully comply with federal regulations could result in amounts being considered unallowable by granting agencies. Prior Finding Number: 2022-001