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
2023-004 – Procurement, Suspension and Debarment Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023 Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: CFR § 200.320 indicates the various methods of procurement to be followed. The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and § 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. § 200.214 Suspension and debarment indicates non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The Organization did not have a procurement policy or suspension and debarment policy in place which was consistent with the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate procurement process. Questioned costs: N/A Context: 5 of 5 vendors selected for procurement testing, did not have documentation showing that the cost had been procured in accordance with the Uniform Guidance. Additionally, 2 of 2 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate procurement, suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: No Recommendation: We recommend the Organization revised its internal controls related to procurement, suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization is in the process of developing a procurement policy and suspension and debarment policies that aligns with Uniform Guidance.
2023-004 – Procurement, Suspension and Debarment Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023 Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: CFR § 200.320 indicates the various methods of procurement to be followed. The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and § 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. § 200.214 Suspension and debarment indicates non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The Organization did not have a procurement policy or suspension and debarment policy in place which was consistent with the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate procurement process. Questioned costs: N/A Context: 5 of 5 vendors selected for procurement testing, did not have documentation showing that the cost had been procured in accordance with the Uniform Guidance. Additionally, 2 of 2 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate procurement, suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: No Recommendation: We recommend the Organization revised its internal controls related to procurement, suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization is in the process of developing a procurement policy and suspension and debarment policies that aligns with Uniform Guidance.
2023-004 – Procurement, Suspension and Debarment Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023 Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: CFR § 200.320 indicates the various methods of procurement to be followed. The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and § 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. § 200.214 Suspension and debarment indicates non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The Organization did not have a procurement policy or suspension and debarment policy in place which was consistent with the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate procurement process. Questioned costs: N/A Context: 5 of 5 vendors selected for procurement testing, did not have documentation showing that the cost had been procured in accordance with the Uniform Guidance. Additionally, 2 of 2 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate procurement, suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: No Recommendation: We recommend the Organization revised its internal controls related to procurement, suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization is in the process of developing a procurement policy and suspension and debarment policies that aligns with Uniform Guidance.
2023-004 – Procurement, Suspension and Debarment Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; Illinois Criminal Justice Information Authority Pass-Through Number(s): 20220246 - 2023; 20220245 - 2023; 822007 - 2023 Award Period: 3/1/22-12/31/23; 3/1/22-12/31/23; 3/1/22-12/31/24; 4/1/22-6/30/23 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: CFR § 200.320 indicates the various methods of procurement to be followed. The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and § 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. § 200.214 Suspension and debarment indicates non-Federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: The Organization did not have a procurement policy or suspension and debarment policy in place which was consistent with the requirements of the Uniform Guidance. As a result, the Organization could not provide supporting documentation showing that engaged vendors had gone through an appropriate procurement process. Questioned costs: N/A Context: 5 of 5 vendors selected for procurement testing, did not have documentation showing that the cost had been procured in accordance with the Uniform Guidance. Additionally, 2 of 2 vendors selected for testing suspension and debarment, did not have documentation showing that suspension and debarment had been checked prior to entering into a contract. Cause: Error by management in understanding Uniform Guidance requirements. Effect: Lack of appropriate procurement, suspension and debarment policies could result in the Organization engaging vendors who are debarred from doing business with the United States Government and/or using federal funds in manner that is not the most efficient or economical. Repeat Finding: No Recommendation: We recommend the Organization revised its internal controls related to procurement, suspension and debarment such that they align with the requirements of the Uniform Guidance. Views of responsible officials: The Organization is in the process of developing a procurement policy and suspension and debarment policies that aligns with Uniform Guidance.
Information on the Federal Program U.S. Department of Education – Passed-through New Jersey Department of Education: Education Stabilization Fund (ESF): ESSER II Assistance Listing No. 84.425 3/13/2020 – 9/30/2023 ESSER III Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Learning Acceleration Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Summer Learning and Enrichment Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 Criteria or Specific Requirement Per 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards dictates when the value of procurement for property or services exceed the simplified acquisition threshold or a lower threshold established by a non-Federal entity (State of New Jersey), formal procurement methods are required. Condition The School District did not provide evidence that it was in complete compliance with formal procurement methods. Questioned Costs Unknown. Context Purchases made by the School District in excess of the procurement threshold established by a non-Federal entity (State of New Jersey) did not have supporting documentation available to verify complete compliance with formal procurement methods. Effect or Potential Effect The School District was not in compliance with 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Cause Unknown. Identification as a Repeat Finding See Finding 2022-003. Recommendation That the School District retain evidence that it complied with formal procurement methods as noted in 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.
Information on the Federal Program U.S. Department of Education – Passed-through New Jersey Department of Education: Education Stabilization Fund (ESF): ESSER II Assistance Listing No. 84.425 3/13/2020 – 9/30/2023 ESSER III Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Learning Acceleration Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Summer Learning and Enrichment Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 Criteria or Specific Requirement Per 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards dictates when the value of procurement for property or services exceed the simplified acquisition threshold or a lower threshold established by a non-Federal entity (State of New Jersey), formal procurement methods are required. Condition The School District did not provide evidence that it was in complete compliance with formal procurement methods. Questioned Costs Unknown. Context Purchases made by the School District in excess of the procurement threshold established by a non-Federal entity (State of New Jersey) did not have supporting documentation available to verify complete compliance with formal procurement methods. Effect or Potential Effect The School District was not in compliance with 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Cause Unknown. Identification as a Repeat Finding See Finding 2022-003. Recommendation That the School District retain evidence that it complied with formal procurement methods as noted in 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.
Information on the Federal Program U.S. Department of Education – Passed-through New Jersey Department of Education: Education Stabilization Fund (ESF): ESSER II Assistance Listing No. 84.425 3/13/2020 – 9/30/2023 ESSER III Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Learning Acceleration Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Summer Learning and Enrichment Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 Criteria or Specific Requirement Per 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards dictates when the value of procurement for property or services exceed the simplified acquisition threshold or a lower threshold established by a non-Federal entity (State of New Jersey), formal procurement methods are required. Condition The School District did not provide evidence that it was in complete compliance with formal procurement methods. Questioned Costs Unknown. Context Purchases made by the School District in excess of the procurement threshold established by a non-Federal entity (State of New Jersey) did not have supporting documentation available to verify complete compliance with formal procurement methods. Effect or Potential Effect The School District was not in compliance with 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Cause Unknown. Identification as a Repeat Finding See Finding 2022-003. Recommendation That the School District retain evidence that it complied with formal procurement methods as noted in 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.
Information on the Federal Program U.S. Department of Education – Passed-through New Jersey Department of Education: Education Stabilization Fund (ESF): ESSER II Assistance Listing No. 84.425 3/13/2020 – 9/30/2023 ESSER III Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Learning Acceleration Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 ESSER III – Summer Learning and Enrichment Assistance Listing No. 84.425 3/13/2020 – 9/30/2024 Criteria or Specific Requirement Per 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards dictates when the value of procurement for property or services exceed the simplified acquisition threshold or a lower threshold established by a non-Federal entity (State of New Jersey), formal procurement methods are required. Condition The School District did not provide evidence that it was in complete compliance with formal procurement methods. Questioned Costs Unknown. Context Purchases made by the School District in excess of the procurement threshold established by a non-Federal entity (State of New Jersey) did not have supporting documentation available to verify complete compliance with formal procurement methods. Effect or Potential Effect The School District was not in compliance with 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Cause Unknown. Identification as a Repeat Finding See Finding 2022-003. Recommendation That the School District retain evidence that it complied with formal procurement methods as noted in 2 CFR § 200.320 under Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.
Program Name: Continuum of Care Assistance listing #: 14.218 Federal Awarding Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Procurement Criteria: According to 2 CFR 200.320(a)(2) price quotations must be obtained from an adequate number of qualified sources for the acquisition of property or services for which the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. Condition: The Organization did not follow their small purchase procedures used according to their procurement policy (for procurements between $10,000 and $250,000). Cause: Many expenses were split between multiple programs over the course of the program. While the expenditures were individually within the micro-purchase threshold, combined, the amounts exceeded this. Effect: The Organization did not adequately meet the requirements for their procurement policy to perform a cost/price analysis on their contractors. Repeat Finding: This is not a repeat finding. Questioned Costs: There were no questioned costs related to this finding. Recommendation: We recommend the Organization receive price quotations for all material purchases and recurring expenditures relevant to federal awards.
Program Name: Continuum of Care Assistance listing #: 14.218 Federal Awarding Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Procurement Criteria: According to 2 CFR 200.320(a)(2) price quotations must be obtained from an adequate number of qualified sources for the acquisition of property or services for which the aggregate dollar amount is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. Condition: The Organization did not follow their small purchase procedures used according to their procurement policy (for procurements between $10,000 and $250,000). Cause: Many expenses were split between multiple programs over the course of the program. While the expenditures were individually within the micro-purchase threshold, combined, the amounts exceeded this. Effect: The Organization did not adequately meet the requirements for their procurement policy to perform a cost/price analysis on their contractors. Repeat Finding: This is not a repeat finding. Questioned Costs: There were no questioned costs related to this finding. Recommendation: We recommend the Organization receive price quotations for all material purchases and recurring expenditures relevant to federal awards.
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 ‘Associates in Counseling’. 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: $82,119 CAUSE: The District utilized this vendor as they felt these professional services best fit 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: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See 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 ‘Associates in Counseling’. 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: $82,119 CAUSE: The District utilized this vendor as they felt these professional services best fit 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: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See 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 ‘Associates in Counseling’. 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: $82,119 CAUSE: The District utilized this vendor as they felt these professional services best fit 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: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See 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 ‘Associates in Counseling’. 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: $82,119 CAUSE: The District utilized this vendor as they felt these professional services best fit 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: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See 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 three (3) vendors - CJAWS, Inc., Edmentum, Inc., and SapphireK12, Inc. This is a repeat finding (2022-007) from the previous fiscal year for CJAWS, Inc. and Edmentum, Inc. 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 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $33,498, Edmentum, Inc. - $19,190, SapphireK12, Inc. $26,651 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from three (3) vendors - CJAWS, Inc., Edmentum, Inc., and SapphireK12, Inc. This is a repeat finding (2022-007) from the previous fiscal year for CJAWS, Inc. and Edmentum, Inc. 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 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $33,498, Edmentum, Inc. - $19,190, SapphireK12, Inc. $26,651 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from three (3) vendors - CJAWS, Inc., Edmentum, Inc., and SapphireK12, Inc. This is a repeat finding (2022-007) from the previous fiscal year for CJAWS, Inc. and Edmentum, Inc. 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 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $33,498, Edmentum, Inc. - $19,190, SapphireK12, Inc. $26,651 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from three (3) vendors - CJAWS, Inc., Edmentum, Inc., and SapphireK12, Inc. This is a repeat finding (2022-007) from the previous fiscal year for CJAWS, Inc. and Edmentum, Inc. 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 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $33,498, Edmentum, Inc. - $19,190, SapphireK12, Inc. $26,651 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my review of the District’s compliance with the requirements for noncompetitive procurement, I noted the District did not document its rationale for purchases made from three (3) vendors - CJAWS, Inc., Edmentum, Inc., and SapphireK12, Inc. This is a repeat finding (2022-007) from the previous fiscal year for CJAWS, Inc. and Edmentum, Inc. 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 2 CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement. QUESTIONED COST: CJAWS, Inc. - $33,498, Edmentum, Inc. - $19,190, SapphireK12, Inc. $26,651 CAUSE: From a review of the School District’s policies as published on the District’s website, the District has not updated their policies to include those related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). RECOMMENDATION: I recommend that the School District update their policies to include those most recent related to ‘federal fiscal compliance’ in accordance with the Uniform Guidance, in particular, procurement policies to address the requirements of Section 2 CFR 200.318(i) and 320(c). In addition, I would recommend that District personnel responsible for expenditures related to federal funding receive updated training related to ‘procurement’ policies and procedures as they relate to federal funding. 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.
2023-003: Procurement Federal Agency: U.S. Federal Government Federal Program Title: Research and Development Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Multiple Award Period: July 1, 2022 to June 30, 2023 Type of Finding: • Other Matters • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University did not have documentation for reasonings of why they did not obtain competitive bids. Context: During our testing we identified 2 of the 8 contracts tested did not include adequate documentation to award the contracts without a competitive bid process. Questioned costs: $27,287 Cause: A misunderstanding of the procurement process by grant personnel. Effect: Documentation for why the University did not obtain competitive bids was undocumented. Repeat finding: No Recommendation: We recommend the University evaluate its procedures and implement an additional control to document reasons for obtaining competitive bids. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.
2023-003: Procurement Federal Agency: U.S. Federal Government Federal Program Title: Research and Development Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Multiple Award Period: July 1, 2022 to June 30, 2023 Type of Finding: • Other Matters • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Federal Government requires that all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of 2 CFR section 200.319 and 2 CFR section 200.320. In addition, per the Uniform Guidance CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University did not have documentation for reasonings of why they did not obtain competitive bids. Context: During our testing we identified 2 of the 8 contracts tested did not include adequate documentation to award the contracts without a competitive bid process. Questioned costs: $27,287 Cause: A misunderstanding of the procurement process by grant personnel. Effect: Documentation for why the University did not obtain competitive bids was undocumented. Repeat finding: No Recommendation: We recommend the University evaluate its procedures and implement an additional control to document reasons for obtaining competitive bids. Views of responsible officials: Management agrees with the finding and has developed a plan to correct the finding.
Inadequate Records Retention (Procurement) Criteria: Per Federal regulations for general procurement standards (2 CFR § 200.318 (i)), non-Federal entity must maintain records sufficient to detail the history of the procurement process. These records will include but are not limited to, the following: Rationale for the method of procurement, selection or rejection, and the basis for the contract price. Condition: In our procurement testing for CSLFRF funding, the City was unable to provide evidence that demonstrates public notice was published according to (2 CFR § 200.320(b)) for 1 of the 5 projects selected. Questioned Costs: $0 Cause and Effect: Due to the City not having a centralized repository for procurement records, sufficient evidence was unable to verify that procurements provide full and open competition to potential bidders, as there was a lack of documentation related to the public notice for open bidding to occur. Recommendation: We recommend the City updates their procurement policies and procedures by centrally tracking procurement documents for up to five years. Centrally tracking documentation will help the City mitigate potential contractual and administrative issues related to procurement. Management Response: The Finance Director is initiating conversations with department heads regarding updating procurement policies and procedures. We are taking steps to ensure all procurement documents are stored centrally in order for these items to be readily available moving forward.
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Saving Ourselves ($30,000), AGI Repair ($16,216), IXL ($19,218), Learning Systems Associates LLC ($25,425), AGC Education Inc. ($11,644), Apple ($163,505), Germ Solutions LLC ($160,070), Graham Security ($12,025), Curriculum Designers, Inc. ($27,875), RJ Rhodes Transit, Inc. ($24,845). CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District 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. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $490,823 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors –– Houghton Mifflin-Harcourt ($509,919), Beaver Valley Intermediate Unit ($419,826), and Smart Solutions ($449,303). CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District 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. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $1,379,048 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Saving Ourselves ($30,000), AGI Repair ($16,216), IXL ($19,218), Learning Systems Associates LLC ($25,425), AGC Education Inc. ($11,644), Apple ($163,505), Germ Solutions LLC ($160,070), Graham Security ($12,025), Curriculum Designers, Inc. ($27,875), RJ Rhodes Transit, Inc. ($24,845). CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District 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. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $490,823 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors –– Houghton Mifflin-Harcourt ($509,919), Beaver Valley Intermediate Unit ($419,826), and Smart Solutions ($449,303). CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District 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. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $1,379,048 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Saving Ourselves ($30,000), AGI Repair ($16,216), IXL ($19,218), Learning Systems Associates LLC ($25,425), AGC Education Inc. ($11,644), Apple ($163,505), Germ Solutions LLC ($160,070), Graham Security ($12,025), Curriculum Designers, Inc. ($27,875), RJ Rhodes Transit, Inc. ($24,845). CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District 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. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $490,823 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors –– Houghton Mifflin-Harcourt ($509,919), Beaver Valley Intermediate Unit ($419,826), and Smart Solutions ($449,303). CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District 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. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $1,379,048 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that either 1) three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000 were obtained, 2) competitive bidding was performed for the purchases of goods over $22,500 or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors: Saving Ourselves ($30,000), AGI Repair ($16,216), IXL ($19,218), Learning Systems Associates LLC ($25,425), AGC Education Inc. ($11,644), Apple ($163,505), Germ Solutions LLC ($160,070), Graham Security ($12,025), Curriculum Designers, Inc. ($27,875), RJ Rhodes Transit, Inc. ($24,845). CRITERIA: As specified in 2 CFR 200 318(i) of the Uniform Guidance, the District 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. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented and over $22,500 formal bidding procedures must be utilized. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, or 4) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. QUESTIONED COST: $490,823 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, and 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding. VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
CONDITION: During my review of Aliquippa School District’s compliance with the requirements of the Public School Code and the Uniform Guidance for procurement of goods and services, the District was unable to provide documentation or other evidence that 1) competitive bidding was performed for the purchases of goods or services over $22,500 and 2) a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000), or 3) the vendor met the requirements of a ‘sole source provider’ with documentation to support such designation, for the following vendors –– Houghton Mifflin-Harcourt ($509,919), Beaver Valley Intermediate Unit ($419,826), and Smart Solutions ($449,303). CRITERIA: As specified in 2 CFR 200. 318(i) of the Uniform Guidance, the District 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. In addition, small purchase procedures per 2 CFR 200.320(a)(2)(i) for acquisitions between the micro-purchase threshold (currently $10,000) and the simplified acquisition threshold (current $250,000), price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate. Per 24 PA Statue 8.807.1, there should be three quotes that are either written or well documented. Furthermore, Section 2 CFR 200.320(c’) of the Uniform Guidance details five (5) circumstances in which noncompetitive procurement can be used. CAUSE: District officials responsible for federal procurement did not adhere to District, state and federal policies and regulations regarding the expenditure of federal funds. EFFECT: The District did not comply with 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, or 4) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). QUESTIONED COST: $1,379,048 RECOMMENDATION: I recommend that for all future purchases of goods and/or services utilizing federal funds, that the District adhere to the requirements of 1) the District’s Procurement Policy for Federal Programs, 2) the 24 PA Statute 8.807.1, 3) Section 2 CFR 200.318(i) of the Uniform Guidance regarding maintaining records sufficient to detail the history of procurement which includes rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price, 4) Section 2 CFR 200.300(a)(2)(i) of the Uniform Guidance regarding obtaining three price or rate quotations for the purchase of goods between $10,000 and $22,500, and services between $10,000 and $250,000, and as applicable, 5) Section 2 CFR 200.318(i) and Section 2CFR 200.320(c’) of the Uniform Guidance regarding the proper documentation required for noncompetitive procurement using federal funding, and 5) Section CFR 200.324(a) of the Uniform Guidance regarding the requirement to perform a cost or price analysis for purchases in excess of the Simplified Acquisition Threshold ($250,000). VIEW OF RESPONSIBLE OFFICIALS: See Correction Action Plan
Finding Number: 2023-004 Prior Year Finding: 2022-004 Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 – Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2022 – 6/30/2023) Compliance Requirement: Procurement Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or Specific Requirement: Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Per 2 CFR section 200.318, a 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. Per 2 CFR section 200.319, 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. Per the Town’s purchasing policy, goods or services costing $10,000 or more must be purchased from the lowest responsive bidder meeting specifications after advertising for bids. Condition/Context: The Town failed to provide documentation supporting compliance with required procurement processes for goods or services exceeding $10,000 for four out of six vendors tested. This includes a lack of evidence on how these vendors were selected and whether the procurement process ensured full and open competition. Additionally, two vendors utilized by the police department did not undergo the general bidding process. Questioned Costs: Unknown. Cause: The Town’s internal controls were not sufficient to ensure that procurement policies were followed for purchases made for the program. Effect: Failure to adhere to procurement policies and procedures may result in obtaining goods or services under terms that are not in the best interest of the federal program. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-04. Recommendation: The Town should review and enhance controls and procedures to ensure that it follows procurement policy for all goods and services charged to the program and should ensure that all departments are subject to applicable controls, policies and procedures. Views of Responsible Officials: Management agrees with the finding.
FA 2023-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Numbers: 235GA324N1199 (Year: 2023), 225GA324N1099 (Year: 2023) Questioned Costs: $3,381 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were reviewed and approved and that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $1,981,179 were expended and reported on the Berrien 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. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Additionally, 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 which reflect applicable 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.” In addition, 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 40 expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For 12 expenditures, evidence of review and approval was not reflected within the voucher package. • Two expenditures were not recorded in the correct fiscal year. Additionally, auditor reviewed 38 of these same expenditures to determine if procurement transactions complied with the School District’s procurement procedures and proper oversight was maintained to ensure that contractors were performing according to their contracts. The following deficiency was noted: • The School District could not provide evidence that an adequate number of rate or price quotations were obtained from qualified sources for three small purchase expenditures reviewed. Questioned Cost: Upon testing a sample of $73,322 in procurement transactions services expenditures, known questioned costs of $3,381 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $1,341,865 in procurement transactions, we project the likely questioned costs to be approximately $61,878. Cause: When discussing the issues noted with management, they stated that the new Director was unaware of these federal requirements. She did not maintain adequate documents due to being new in her position. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance related to the Child Nutrition Cluster. Failure to ensure that expenditures are appropriately approved and procedures to address procurement and suspension and debarment compliance requirements are implemented exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds for unallowable purposes and/or with unqualified vendors. In addition, this deficiency could lead to the return of funding associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to the Child Nutrition Cluster. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review and approval, required procurement methods are properly identified and followed, and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
FA 2023-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Numbers: 235GA324N1199 (Year: 2023), 225GA324N1099 (Year: 2023) Questioned Costs: $3,381 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were reviewed and approved and that the School District’s procurement and suspension and debarment procedures were followed. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $1,981,179 were expended and reported on the Berrien 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. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Additionally, 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 which reflect applicable 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.” In addition, 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 40 expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For 12 expenditures, evidence of review and approval was not reflected within the voucher package. • Two expenditures were not recorded in the correct fiscal year. Additionally, auditor reviewed 38 of these same expenditures to determine if procurement transactions complied with the School District’s procurement procedures and proper oversight was maintained to ensure that contractors were performing according to their contracts. The following deficiency was noted: • The School District could not provide evidence that an adequate number of rate or price quotations were obtained from qualified sources for three small purchase expenditures reviewed. Questioned Cost: Upon testing a sample of $73,322 in procurement transactions services expenditures, known questioned costs of $3,381 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $1,341,865 in procurement transactions, we project the likely questioned costs to be approximately $61,878. Cause: When discussing the issues noted with management, they stated that the new Director was unaware of these federal requirements. She did not maintain adequate documents due to being new in her position. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance related to the Child Nutrition Cluster. Failure to ensure that expenditures are appropriately approved and procedures to address procurement and suspension and debarment compliance requirements are implemented exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds for unallowable purposes and/or with unqualified vendors. In addition, this deficiency could lead to the return of funding associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to the Child Nutrition Cluster. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review and approval, required procurement methods are properly identified and followed, and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: Unknown Award Period: March 3, 2021 – December 31, 2026 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. The Town should have internal controls designed to ensure compliance with those provisions. Appendix II to Part 200 addresses contract provisions requirements and 2 CFR section 200.320 (c) addresses the noncompetitive procurement circumstances. Condition: Internal controls were not in place to ensure that all vendors had a formal contract in place or were selected in accordance with Uniform Guidance. Questioned costs: Under reportable limit Context: 1 of the 2 vendors tested did not have a formal contract in place. 1 of the 2 vendors did not follow federal procurement requirements and utilized state procurement exemptions. Cause: Procedures were not in place to ensure federal procurement requirements were followed. Effect: Noncompliance with federal procurement, suspension, and debarment compliance requirements. Recommendation: We recommend the Town implement controls that ensure adherence to the procurement requirements of the Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-005: Significant Deficiency - Noncompliance, Procurement- Bids Assistance Listing Program Title and Number: Coronavirus State and Local Fiscal Recovery 21.027 Federal Agency: Department of Treasury Pass-through Entity: N/A Award year: 2023 Criteria: Per 2 CFR Section 200.319(a) “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.” Condition: Seymour Public Schools purchased goods from Boar’s Head in the amount of $38,000 which did not go out to bid consistent with the full and open competition compliance requirement. Cause: Management considered Boar’s Head the only vendor selling the goods they wished to purchase, as such, chose to not put the expenditure out to bid. Effect: No direct effect can be determined. Questioned costs: Not applicable. Context: Systemic in nature. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that Seymour Public Schools follow existing internal control policies involving purchases over $25,000 going out to bid for every such expenditure. Management Response: Management agrees with the finding.
United States Department of Treasury Federal Assistance Listing No. 21.027 American Rescue Plan Act (ARPA) Significant deficiency over Procurement and Suspension and Debarment Repeat Finding: No Condition: During our audit we noted that procurement documentation was not available to support the selection of a sole source vendor. Also, we were unable to obtain documentation to support BCI entering into contractual agreements with vendors who were not debarred or suspended from doing business with the Federal government. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. Per 2 CFR 200.320 General procurement stands: (a) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: (1) The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold .(2) The item is available only from a single source; (3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; (4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or (5) After solicitation of a number of sources, competition is determined inadequate. Per 2 CFR 200.318 General procurement stands: (b) The Non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part. Per Uniform Guidance, Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Cause: BCI did not apply the required procurement policy relative to sole source contracts in accordance with Uniform Guidance. Management also did not complete a review of vendors/contractors to verify they are not suspended, debarred, or otherwise excluded before contracting. Effect: The Organization does not have adequate documentation on whether they have entered into transactions with eligible entities and is in compliance with Federal guidelines. Questioned Costs: Unknown Recommendation: We recommend the Organization update and follow their controls to identify vendors that should go through the procurement process. We also recommend the Organization follow their process to verify that entities are not suspended, debarred, or otherwise excluded annually at time of award and to document these procedures. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the Corrective Action Plan. Auditor’s Conclusion: Finding remains as stated.
FINDING 2023-001 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States; Special Education Preschool Grants; COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-034-PN01, 23611-034-PN01, 22611-034-ARP, 21619-034-PN01; 22619-034-PN01, 23619-034-PN01, 22619-034-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, the informal procurement method is permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of 23 vendor claims were determined to require small purchase procedures. Of the vendor claims, totaling $113,815, 4 were selected for testing. For the 4 vendor claims tested, the School Corporation did not obtain an adequate number of price or rate quotations nor was its documentation detailing the history of procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation, it was determined that the School Corporation ensures all service contracts include a provision regarding suspension and debarment. The contracts are reviewed and signed by a knowledgeable member of the School Corporation. A population of eight covered transactions for goods or services that equaled or exceeded $25,000 paid from SPED funds during the audit period was identified. A sample of two transactions, totaling $178,915, was selected for testing. For both transactions, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal control in the Federal Government' issued by the Comptroller General of the United States or the "Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Small purchases– (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, procurement procedures for goods and services were not adhered to, and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States; Special Education Preschool Grants; COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-034-PN01, 23611-034-PN01, 22611-034-ARP, 21619-034-PN01; 22619-034-PN01, 23619-034-PN01, 22619-034-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, the informal procurement method is permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of 23 vendor claims were determined to require small purchase procedures. Of the vendor claims, totaling $113,815, 4 were selected for testing. For the 4 vendor claims tested, the School Corporation did not obtain an adequate number of price or rate quotations nor was its documentation detailing the history of procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation, it was determined that the School Corporation ensures all service contracts include a provision regarding suspension and debarment. The contracts are reviewed and signed by a knowledgeable member of the School Corporation. A population of eight covered transactions for goods or services that equaled or exceeded $25,000 paid from SPED funds during the audit period was identified. A sample of two transactions, totaling $178,915, was selected for testing. For both transactions, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal control in the Federal Government' issued by the Comptroller General of the United States or the "Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Small purchases– (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, procurement procedures for goods and services were not adhered to, and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States; Special Education Preschool Grants; COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-034-PN01, 23611-034-PN01, 22611-034-ARP, 21619-034-PN01; 22619-034-PN01, 23619-034-PN01, 22619-034-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, the informal procurement method is permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of 23 vendor claims were determined to require small purchase procedures. Of the vendor claims, totaling $113,815, 4 were selected for testing. For the 4 vendor claims tested, the School Corporation did not obtain an adequate number of price or rate quotations nor was its documentation detailing the history of procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation, it was determined that the School Corporation ensures all service contracts include a provision regarding suspension and debarment. The contracts are reviewed and signed by a knowledgeable member of the School Corporation. A population of eight covered transactions for goods or services that equaled or exceeded $25,000 paid from SPED funds during the audit period was identified. A sample of two transactions, totaling $178,915, was selected for testing. For both transactions, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal control in the Federal Government' issued by the Comptroller General of the United States or the "Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Small purchases– (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, procurement procedures for goods and services were not adhered to, and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: Special Education Cluster (IDEA) - Procurement and Suspension and Debarment Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States; Special Education Preschool Grants; COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-034-PN01, 23611-034-PN01, 22611-034-ARP, 21619-034-PN01; 22619-034-PN01, 23619-034-PN01, 22619-034-ARP Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context Procurement - Small Purchases Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $250,000 unless a lower, more restrictive threshold is set by a nonfederal entity. As Indiana Code has set a more restrictive threshold of $150,000, the informal procurement method is permitted when the value of the procurement does not exceed $150,000. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. A total of 23 vendor claims were determined to require small purchase procedures. Of the vendor claims, totaling $113,815, 4 were selected for testing. For the 4 vendor claims tested, the School Corporation did not obtain an adequate number of price or rate quotations nor was its documentation detailing the history of procurement, which must include the reason for the procurement method used. Suspension and Debarment Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAM exclusions, collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. INDIANA STATE BOARD OF ACCOUNTS 18 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Upon inquiry of the School Corporation, it was determined that the School Corporation ensures all service contracts include a provision regarding suspension and debarment. The contracts are reviewed and signed by a knowledgeable member of the School Corporation. A population of eight covered transactions for goods or services that equaled or exceeded $25,000 paid from SPED funds during the audit period was identified. A sample of two transactions, totaling $178,915, was selected for testing. For both transactions, the School Corporation did not verify the vendors' suspension and debarment status prior to payment. The lack of effective internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal control in the Federal Government' issued by the Comptroller General of the United States or the "Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.318 states in part: "(a) The non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. . . . (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use document procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . INDIANA STATE BOARD OF ACCOUNTS 19 METROPOLITAN SCHOOL DISTRICT OF LAWRENCE TOWNSHIP SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (2) Small purchases– (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, procurement procedures for goods and services were not adhered to, and vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure there are appropriate procurement procedures for goods and services and contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into any contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2023-009 – Procurement, Small Purchase, and Suspension and Debarment (Material Weakness in Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: COVID-19 Coronavirus State and Local Fiscal Recovery Funds, 21.027 Federal Awarding Agency: U.S. Department of the Treasury Federal Award ID Number: N/A Federal Award Year: 2023 Condition - The County did not apply the correct small purchase threshold for identifying purchases that need to obtain quotes in their policy. Population $10k-$20k that is not included in the small purchase policy included transactions totaling $18,000. The County does not review for suspension and debarment prior to entering into a covered transaction. During our review of testwork, two (2) out of two (2) transactions did not contain the required quotes obtained prior to purchase. Criteria - Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained. Per 2 CFR 180.300, entering into a covered transaction you must verify that the business is not excluded or disqualified by checking SAM exclusions, or collecting a certification form, or adding a clause or condition to the covered transaction. Cause - Policies not adequate to meet federal guidelines and need to be updated. The County was unaware all vendors receiving federal funds needed to get checked for suspension and debarment. Proper procurement method not utilized. Questioned Costs – Questioned and likely costs of $18,000 Effect - The County may unintentionally use a higher cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold and may use a vendor that has been suspended or debarred. Auditor’s Recommendation - The auditor recommends that the procurement policy be updated to comply with all relevant federal procurement requirements and reviewed for necessary revisions regularly and train staff in the purchasing department on the requirements for all thresholds. In addition the County needs to include a section on entering into covered transactions and train staff in the purchasing department of the requirement to check for any suspension or debarment. Views of Responsible Officials and Planned Corrective Action - Our Chief Procurement Officer has been trained on entering into covered transactions and the requirement to check for any suspension or debarment by vendors in SAM.gov. The County will also maintain quotations for items over the micro-purchase threshold. This will be a documented process in the new policy and procedures manual for federal guidelines. Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director Timeline and Estimated Completion Date –No later than August 31, 2024.
2023-010 – Procurement, Small Purchase and Suspension and Debarment (Material Weakness in Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509 Federal Awarding Agency: U.S. Department of the Transportation Pass-Through Entity: New Mexico Department of Transportation Federal Award ID Number: N/A Federal Award Year: 2023 Condition - The County did not apply the correct small purchase threshold for identifying purchases that need to obtain quotes in their policy. Population $10k-$20k not included in small purchase policy included transactions totaling $24,308. The County does not review for suspension and debarment prior to entering into a covered transaction. During our review of testwork, two (2) of two (2) transactions tested did not have the supporting documentation of State Price Agreements utilized. Criteria - Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained. Per 2 CFR 180.300, entering into a covered transaction you must verify that the business is not excluded or disqualified by checking SAM exclusions, or collecting a certification form, or adding a clause or condition to the covered transaction. Cause - Policies not adequate to meet federal guidelines and need to be updated. The County was unaware all vendors receiving federal funds needed to get checked for suspension and debarment. The County is not retaining documentation in the decision to utilize Price Agreements. Questioned Costs – Questioned and likely costs of $24,308 Effect - The County may unintentionally use a higher cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold and may use a vendor that has been suspended or debarred. Auditor’s Recommendation - The auditor recommends that the procurement policy be updated to comply with all relevant federal procurement requirements and reviewed for necessary revisions regularly. In addition the County needs to include a section on entering into covered transactions and train staff in the purchasing department of the requirement to check for any suspension or debarment and the need to retain supporting documentation. Views of Responsible Officials and Planned Corrective Action - Our Chief Procurement Officer has been trained on entering into covered transactions and the requirement to check for any suspension or debarment by vendors in SAM.gov. The County will also maintain quotations for items over the micro-purchase threshold. This will be a documented process in the new policy and procedures manual for federal guidelines. Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director Timeline and Estimated Completion Date – No later than August 31, 2024. -