FINDING 2022-001: PROCUREMENT POLICY (30000, 50000)Assistance Listing #10.553 & 10.555 ? U.S. Department of Agriculture, California Department of Education,National School Lunch Program, Child Nutrition ClusterCriteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients ofStates, must follow the procurement standards set out at 2 CFR sections 200.319 and 200.320. For small purchasesunder $250,000 the entity must obtain quotations from an adequate number of qualified sources, provided that theprocurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200.For purchases over $250,000 the entity must obtain sealed bids, provided that the procurements conform toapplicable Federal statutes and the procurement requirements identified in 2 CFR part 200.Condition: The District could not provide an auditable trail to prove that it followed procurement methods for smallpurchases and purchases over $250,000. The procurement steps did not reflect the requirements identified in 2 CFRpart 200.319 and 200.320.Questioned Cost: Unknown.Context: We tested three contracts, two which were under the simplified threshold and one that requiredcompetitive bidding. The three contracts totaled $891,380.Effect: Failure to adopt a clear written policy that conforms to applicable Federal statutes and the procurementrequirements is a lack control over compliance in procurement transactions.Cause: District approved and awarded contracts but could not show that it followed procurement requirement in 2CFR 200.319 and 200.320.Recommendation: We recommend that the District follow procurement requirements identified in 2 CFR part 200when purchasing items with Federal funds.Views of Responsible Officials:The District employed an experienced Director who satisfied all of the CDE requirements, communicated with andworked well with CDE, and who typically followed all requirements. For whatever reason, this Director apparentlydid not follow the procurement requirements for 2021-22. It is possible that the Director thought therequirements were waived due to the pandemic, or possibly followed them but left no discoverable audit trail whenshe left the District in the fall of 2021. The District worked to correct this for the 2022-23 school year.
FINDING 2022-001: PROCUREMENT POLICY (30000, 50000)Assistance Listing #10.553 & 10.555 ? U.S. Department of Agriculture, California Department of Education,National School Lunch Program, Child Nutrition ClusterCriteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients ofStates, must follow the procurement standards set out at 2 CFR sections 200.319 and 200.320. For small purchasesunder $250,000 the entity must obtain quotations from an adequate number of qualified sources, provided that theprocurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200.For purchases over $250,000 the entity must obtain sealed bids, provided that the procurements conform toapplicable Federal statutes and the procurement requirements identified in 2 CFR part 200.Condition: The District could not provide an auditable trail to prove that it followed procurement methods for smallpurchases and purchases over $250,000. The procurement steps did not reflect the requirements identified in 2 CFRpart 200.319 and 200.320.Questioned Cost: Unknown.Context: We tested three contracts, two which were under the simplified threshold and one that requiredcompetitive bidding. The three contracts totaled $891,380.Effect: Failure to adopt a clear written policy that conforms to applicable Federal statutes and the procurementrequirements is a lack control over compliance in procurement transactions.Cause: District approved and awarded contracts but could not show that it followed procurement requirement in 2CFR 200.319 and 200.320.Recommendation: We recommend that the District follow procurement requirements identified in 2 CFR part 200when purchasing items with Federal funds.Views of Responsible Officials:The District employed an experienced Director who satisfied all of the CDE requirements, communicated with andworked well with CDE, and who typically followed all requirements. For whatever reason, this Director apparentlydid not follow the procurement requirements for 2021-22. It is possible that the Director thought therequirements were waived due to the pandemic, or possibly followed them but left no discoverable audit trail whenshe left the District in the fall of 2021. The District worked to correct this for the 2022-23 school year.
FINDING 2022-001: PROCUREMENT POLICY (30000, 50000)Assistance Listing #10.553 & 10.555 ? U.S. Department of Agriculture, California Department of Education,National School Lunch Program, Child Nutrition ClusterCriteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients ofStates, must follow the procurement standards set out at 2 CFR sections 200.319 and 200.320. For small purchasesunder $250,000 the entity must obtain quotations from an adequate number of qualified sources, provided that theprocurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200.For purchases over $250,000 the entity must obtain sealed bids, provided that the procurements conform toapplicable Federal statutes and the procurement requirements identified in 2 CFR part 200.Condition: The District could not provide an auditable trail to prove that it followed procurement methods for smallpurchases and purchases over $250,000. The procurement steps did not reflect the requirements identified in 2 CFRpart 200.319 and 200.320.Questioned Cost: Unknown.Context: We tested three contracts, two which were under the simplified threshold and one that requiredcompetitive bidding. The three contracts totaled $891,380.Effect: Failure to adopt a clear written policy that conforms to applicable Federal statutes and the procurementrequirements is a lack control over compliance in procurement transactions.Cause: District approved and awarded contracts but could not show that it followed procurement requirement in 2CFR 200.319 and 200.320.Recommendation: We recommend that the District follow procurement requirements identified in 2 CFR part 200when purchasing items with Federal funds.Views of Responsible Officials:The District employed an experienced Director who satisfied all of the CDE requirements, communicated with andworked well with CDE, and who typically followed all requirements. For whatever reason, this Director apparentlydid not follow the procurement requirements for 2021-22. It is possible that the Director thought therequirements were waived due to the pandemic, or possibly followed them but left no discoverable audit trail whenshe left the District in the fall of 2021. The District worked to correct this for the 2022-23 school year.
FINDING 2022-001: PROCUREMENT POLICY (30000, 50000)Assistance Listing #10.553 & 10.555 ? U.S. Department of Agriculture, California Department of Education,National School Lunch Program, Child Nutrition ClusterCriteria: Non-Federal entities other than States, including those operating Federal programs as subrecipients ofStates, must follow the procurement standards set out at 2 CFR sections 200.319 and 200.320. For small purchasesunder $250,000 the entity must obtain quotations from an adequate number of qualified sources, provided that theprocurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200.For purchases over $250,000 the entity must obtain sealed bids, provided that the procurements conform toapplicable Federal statutes and the procurement requirements identified in 2 CFR part 200.Condition: The District could not provide an auditable trail to prove that it followed procurement methods for smallpurchases and purchases over $250,000. The procurement steps did not reflect the requirements identified in 2 CFRpart 200.319 and 200.320.Questioned Cost: Unknown.Context: We tested three contracts, two which were under the simplified threshold and one that requiredcompetitive bidding. The three contracts totaled $891,380.Effect: Failure to adopt a clear written policy that conforms to applicable Federal statutes and the procurementrequirements is a lack control over compliance in procurement transactions.Cause: District approved and awarded contracts but could not show that it followed procurement requirement in 2CFR 200.319 and 200.320.Recommendation: We recommend that the District follow procurement requirements identified in 2 CFR part 200when purchasing items with Federal funds.Views of Responsible Officials:The District employed an experienced Director who satisfied all of the CDE requirements, communicated with andworked well with CDE, and who typically followed all requirements. For whatever reason, this Director apparentlydid not follow the procurement requirements for 2021-22. It is possible that the Director thought therequirements were waived due to the pandemic, or possibly followed them but left no discoverable audit trail whenshe left the District in the fall of 2021. The District worked to correct this for the 2022-23 school year.
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
Finding 2022-001Instance of Non-Compliance ? Procurement, Suspension, Debarment ? Procurement ? GrantsFederal ProgramUnited States Department of EducationI.D.E.A Cluster (84.365A)Criteria: In accordance with 2 CFR sections 200.320(a) (1) and (2) small purchase methods of procurement are to be used for purchases exceeding the micro-purchase limit, $10,000.Statement of Condition: During our testing of the I.D.E.A. Cluster, the District was unable to provide support that proper federal procurement standards were met for a purchase of software. We selected all vendors paid in excess of $10,000 dollars for testing. Four vendors were identified. The District maintains proper documentation of small purchase procurement for three of the four vendors.Questioned Costs: None that exceed $25,000.Context: During our testing of Federal grant compliance, we selected all vendors paid in excess of the micro-purchase federal procurement threshold and traced to procurement documentation. Per 2 CFR 200.320 ?if small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.? The District stated that the software purchase is considered a single source vendor and the purchase was awarded under noncompetitive procurement. However, the District was unable to provide adequate documentation the vendor was a sole source vendor.Cause and Effect: The District follows the State of NJ Local Public School Contract law. In some cases the requirements of Federal procurement are stronger than those of the State. Under State procurement the purchase is considered a purchase of proprietary software and is excluded from competitive procurement. The same exclusion does not apply for Federal Procurement standards and this instance was missed.Recommendation: We suggest the District strengthen internal controls and procedures to ensure that all purchases made in excess of the Federal procurement thresholds are made in accordance with 2 CFR 200.Views of Responsible Officials and Planned Corrective Actions: District management concurs with the finding and has developed a corrective action plan in response to the recommendation above.
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 four (4) vendors - CJAWS, Inc., Edmentum, Inc., Savvas Learning Company, and Technology Resource Advisors, Inc. This is a repeat finding (2021-007) from the previous fiscal year for CJAWS, 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. - $197,791, Edmentum, Inc. - $19,190, Savvas Learning Company - $14,418, Technology Resource Advisors, Inc. - $22,220 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 four (4) vendors - CJAWS, Inc., Edmentum, Inc., Savvas Learning Company, and Technology Resource Advisors, Inc. This is a repeat finding (2021-007) from the previous fiscal year for CJAWS, 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. - $197,791, Edmentum, Inc. - $19,190, Savvas Learning Company - $14,418, Technology Resource Advisors, Inc. - $22,220 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 four (4) vendors - CJAWS, Inc., Edmentum, Inc., Savvas Learning Company, and Technology Resource Advisors, Inc. This is a repeat finding (2021-007) from the previous fiscal year for CJAWS, 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. - $197,791, Edmentum, Inc. - $19,190, Savvas Learning Company - $14,418, Technology Resource Advisors, Inc. - $22,220 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.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
2022-004 — Procurement – Material Weakness in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Interior and U.S. Department of Education Titles: Assistance to Tribally Controlled Community Colleges; Higher Education Institutional Aid; and Education Stabilization Fund ALN Number: 15.027, 84.031, and 84.425 Award years: Various Criteria: According to 2 CFR Section 200.318i, the recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. According to 2 CFR Section 0200.319a, All procurement transactions under the Federal award must be conducted in a manner that provides full and open competition. Condition: The College did not maintain records sufficient to detail the history of each procurement transaction for the nine procurements contracts tested. Cause: The College did not have sufficient procedures in place to ensure that procurement records are maintained. Effect: The College is not in compliance with procurement requirements. Questioned Costs: None Context: Procurement documents were not retained for nine out of nine transactions tested. Recommendation: Formally document and enforce policies and procedures that will promote adequate monitoring of the procurement and bidding process. Ensure that any contract over the College’s threshold ($150,000) follow the sealed bid requirements listed in 2 CFR Section 200.320b1. View of Responsible Officials: The College concurs with this finding.
Procurement and Suspension and Debarment Federal Program Name Higher Education Emergency Relief Fund (HEERF) HEERF Institutional Portion, ALN. 84.425F HEERF Minority Serving Institutions (MSIs), ALN. 84.425L Name of Federal Agency U.S. Department of Education Pass-through Entity N/A Criteria According to 2 CFR Section 200.319, all procurement transactions must be conducted in a manner providing full and open competition. According to 2 CFR Section 200.320 there are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures. 2 CFR section 180.220(b)(1) 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. Condition As part of our testing of fifteen (15) disbursements from institutional funds, we noted the following instances of non-compliance: 1. Six (6) transactions weren’t conducted in a manner providing full and open competition, no quotes nor quote analysis were available for examination. 2. Six (6) transactions Suspension and Debarment verification weren’t performed. Cause The exceptions mentioned above are the result of the failure to implement adequate internal control procedures, such as thorough managerial review, which should detect and correct, on a timely basis, instances where controls are not being followed. Effect The institution COVID-19 policies and procedures were not followed, did not provide for full and open competition and suspension and debarment verification were not performed, as a result of that the USDE could be required to reimburse federal funds to the grantor for the expenditures incurred. Questioned Cost $201,543 Context Of the 142 disbursements, we selected 15 transactions for testing and noted the following instances of noncompliance: 1. Transactions were not conducted in a manner providing full and open competition 6 2. Suspension and Debarment verification were not performed 6 Identification of a Repeat Finding This is not a repeat finding from the immediate previous audit. Views of Responsible Officials and Planned Corrective Actions The Institution management agrees with this finding. Please refer to the corrective action plan on pages 22-26. Recommendation We recommend the Institution to establish adequate procedures and controls, which shall consider, among others, the following: • Shall improve its internal controls over the filing and safeguarding of documents in order to easily identify and retrieve payment vouchers and all related supporting documentation. • Establish and implement written policies and procedures for all aspects of the Purchase administration, including controls for proper review and authorization during the processing and payment of program expenditures. Payment documents and related supporting documentation shall be thoroughly reviewed before they are recorded and processed for payment. All payment vouchers shall be properly authorized by the respective Institution’s representatives and shall be supported with all the required documentation. • Provide adequate training to employees regarding each program requirements and proper procurement and disbursement processing procedures, and as to the importance of safeguarding procedures and the proper coordination and communication for the retrieval of documents when needed.
Procurement and Suspension and Debarment Federal Program Name Higher Education Emergency Relief Fund (HEERF) HEERF Institutional Portion, ALN. 84.425F HEERF Minority Serving Institutions (MSIs), ALN. 84.425L Name of Federal Agency U.S. Department of Education Pass-through Entity N/A Criteria According to 2 CFR Section 200.319, all procurement transactions must be conducted in a manner providing full and open competition. According to 2 CFR Section 200.320 there are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures. 2 CFR section 180.220(b)(1) 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. Condition As part of our testing of fifteen (15) disbursements from institutional funds, we noted the following instances of non-compliance: 1. Six (6) transactions weren’t conducted in a manner providing full and open competition, no quotes nor quote analysis were available for examination. 2. Six (6) transactions Suspension and Debarment verification weren’t performed. Cause The exceptions mentioned above are the result of the failure to implement adequate internal control procedures, such as thorough managerial review, which should detect and correct, on a timely basis, instances where controls are not being followed. Effect The institution COVID-19 policies and procedures were not followed, did not provide for full and open competition and suspension and debarment verification were not performed, as a result of that the USDE could be required to reimburse federal funds to the grantor for the expenditures incurred. Questioned Cost $201,543 Context Of the 142 disbursements, we selected 15 transactions for testing and noted the following instances of noncompliance: 1. Transactions were not conducted in a manner providing full and open competition 6 2. Suspension and Debarment verification were not performed 6 Identification of a Repeat Finding This is not a repeat finding from the immediate previous audit. Views of Responsible Officials and Planned Corrective Actions The Institution management agrees with this finding. Please refer to the corrective action plan on pages 22-26. Recommendation We recommend the Institution to establish adequate procedures and controls, which shall consider, among others, the following: • Shall improve its internal controls over the filing and safeguarding of documents in order to easily identify and retrieve payment vouchers and all related supporting documentation. • Establish and implement written policies and procedures for all aspects of the Purchase administration, including controls for proper review and authorization during the processing and payment of program expenditures. Payment documents and related supporting documentation shall be thoroughly reviewed before they are recorded and processed for payment. All payment vouchers shall be properly authorized by the respective Institution’s representatives and shall be supported with all the required documentation. • Provide adequate training to employees regarding each program requirements and proper procurement and disbursement processing procedures, and as to the importance of safeguarding procedures and the proper coordination and communication for the retrieval of documents when needed.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Criteria The Uniform Guidance 2 CFR §200.320 sets forth the methods of procurement to be followed in the acquisition of property or services required under a Federal award or subaward, which includes formal purchase methods such as proposal or bids when the value of the property or services under a Federal financial assistance award exceeds a certain threshold, as defined. Furthermore, 2 CFR §200.320(c) provides specific circumstances in which noncompetitive procurement can be used. Condition During our audit, we noted that the Organization made subawards to entities which were subject to a formal purchase method, for which competitive processes for selection were not performed, nor was documentation of the specific criteria of 2 CFR §200.320(c) met to support noncompetitive procurements maintained. Cause Management had not updated its policies and procedures to incorporate certain pertinent sections of the procurement standards of the Uniform Guidance. Effect The lack of procurement standards in accordance with the Uniform Guidance may result in allowable cost issues. Recommendation We recommend that the Organization incorporate the procurement standards of the Uniform Guidance to its policies and procedures manual to ensure compliance with Federal standards, including 2 CFR §200.318(h) which stipulates that sufficient detail of the history of the procurement must be maintained, including the selection of the contractor. Views of Responsible Officials and Corrective Action The Organization concurs with the recommendation. As part of our current review and revision process, the Organization plans to adopt the 2 CFR §200.320 procurement guidance and develop supporting policies and procedures to ensure compliance with federal standards. Additionally, the Organization will incorporate the standards outlined in 2 CFR §200.318 to further align our operations with Uniform Guidance requirements, reinforcing our commitment to meeting federal compliance standards. The Organization has prioritized the completion and distribution of the updated financial policies and procedures, including the 2 CFR §200.320 procurement guidance by December 31, 2024.
Federal Agency: U.S. Department of Agriculture; U.S. Department of the Treasury Federal Program Name: Child Nutrition Cluster; Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 10.559; 21.027 Federal Award Identification Number and Year: 214RI306N1099/214RI306N1199 - 2022 Award Period: Fiscal Year 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement The Town and Coventry Public Schools must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. 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 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). UG §200.318 General procurement standards. (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. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (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: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is 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. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) 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 allowed circumstances apply. Condition The Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 4 of 4 procurement transactions tested. Cause Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding Yes Recommendation We recommend that the Town and Coventry Public Schools updates its procurement policy to include all elements identified in 2 CRF sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
Federal Agency: U.S. Department of Agriculture; U.S. Department of the Treasury Federal Program Name: Child Nutrition Cluster; Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 10.559; 21.027 Federal Award Identification Number and Year: 214RI306N1099/214RI306N1199 - 2022 Award Period: Fiscal Year 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement The Town and Coventry Public Schools must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. 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 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). UG §200.318 General procurement standards. (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. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (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: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is 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. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) 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 allowed circumstances apply. Condition The Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Towns purchasing policies within Coventry Public Schools do not include all elements as outlined in 2 CRF sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 4 of 4 procurement transactions tested. Cause Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect The Town and Coventry Public Schools are at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding Yes Recommendation We recommend that the Town and Coventry Public Schools updates its procurement policy to include all elements identified in 2 CRF sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
Condition: During the test of 100% of expenditures, two (2) expenditures totaling $570,080, for the Coronavirus State and Local Fiscal Recovery Funds, the following noncompliance with the Procurement and Suspension and Debarment compliance requirement was noted: • The County failed to properly document the expenditure for one (1) of the two (2) federal expenditures totaling $500,000. They did not execute a contract or award documents, and the invoice was not itemized. This expenditure had a questioned cost of $500,000. Cause of Condition: Policies and procedures have not been designed and implemented to ensure federal expenditures are made in accordance with federal compliance requirements. Effect of Condition: This condition resulted in noncompliance with federal grant requirements and could result in a loss of federal funds. Recommendation: OSAI recommends the County gain an understanding of the requirements for this program and implement internal controls to ensure compliance with these requirements. Management Response: Board of County Commissioners: The Board of County Commissioners is responsible for the overall fiscal concerns of the county. See OKLA. STAT. Title 19, § 345. The Board of County Commissioners, with the cooperation and participation of all elected officials, reviews, develops and implements policies and procedures to create a strong internal control environment. The Board of County Commissioners will work with all elected officials, the third-party administrator, and federal, state and local partners to develop policies, procedures, and internal controls designed to accurately track grants, including the application process, verification, oversight, and reporting of grant requirements. These policies and procedures will be designed to identify requirements for recipients and sub-recipients of grants, ensure accurate equipment and real property management, procurement, recipient and subrecipient monitoring and reporting. Further, policies will ensure a proper understanding of all grant requirements and compliance of the same. To assist in this process, the Board of County Commissioners engaged a third-party administrator to oversee the grant process, including application, eligibility, review, requirements, contracting, recipient tracking and oversight, and documentation and reporting. The Board of County Commissioners will work with the third-party administrator to ensure proper grant administration. Criteria: 2 CFR § 200.303(a) Internal Controls reads as follows: 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). 2 CFR § 200.320 Internal Controls reads as follows: There are three types of procurement methods described in this section: informal procurement methods (for micro-purchases and simplified acquisitions); formal procurement methods (through sealed bids or proposals); and noncompetitive procurement methods. For any of these methods, the recipient or subrecipient must maintain and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319.
Finding 2022-005 Procurement, Suspension, and Debarment - Material Weakness in Internal Control and Material Noncompliance Agency U.S. Department of Treasury Pass-through Entity State of Alaska Department of Commerce, Community, and Economic Development Program ALN: No. 21.027 Coronavirus State and Local Fiscal Recovery Funds – COVID-19 Award No. AK0137 Award Year 2022 Criteria or Specific Requirement In accordance with 2 CFR section 200.320, the City is required to have and use documented procurement policies consistent with the standards of the CFR for any method of procurement used in the acquisition of property or services required under the American Rescue Plan Act. Condition Personnel at the City of Unalaska, acting under the local emergency in effect for FY22 did not follow procurement policies consistent with 2 CFR 200.320 for small purchases in FY22. Cause The City of Unalaska relaxed procurement policies per Resolution 2020-16 passed by the City Council on March 18, 2020. The relaxed procurement policies were not consistent with procurement policies per 2 CFR 200.320. Effect or potential effect The City was not in compliance with 2 CFR section 200.320 during 2022. Goods and services procured by the City under the program may not be the most cost-effective or appropriate for the City. Questioned Costs None. Context We tested the procurement for one sample selected in FY22. BDO was unable to obtain documentation for rate or quote solicitation for the selected sample and upon inquiry, identified that procurement policies at the City were relaxed during FY22. Recommendation Procurement policies should be updated and documented so that they are at least as restrictive as the policies required per the Code of Federal Regulation. Views of responsible officials and planned corrective actions Management agrees with the finding. Management will review procurement policies and update as needed to ensure they are at least as restrictive as the policies required per the Code of Federal Regulation.
2 CFR section 200.320(2i) for 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 price or rate quotations requires that competitive quotes must be obtained from an adequate number of qualified sources. Competitve price quotes for several goods and services that were above the micro-purchase thershold were not obtained.
FA 2022-002 Improve Controls over Procurement and Suspension and Debarment Compliance Requirement: 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 Number: 225GA324N1199 (Year: 2022) Questioned Costs: $474.00 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 the School District’s procurement procedures were followed. Background: 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 $2,764,279.02 were expended and reported on the Monroe County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. 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. 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.” Furthermore, Title 2 CFR Section 180.300 states in part that the non-Federal entity must “verify that the entity with whom you intend to do business is not excluded or disqualified. You can do this by: (a) Checking System for Awards Management (SAM) exclusions; or (b) Collecting a certification from the entity; or (c) Adding a clause or condition to the covered transaction with the entity.” Condition: A sample of 40 procurement transactions 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 procurement compliance requirements were met. The following deficiencies were noted: The appropriate procurement method was not used for the dollar amount and conditions associated with one procurement transaction. The School District could not provide evidence that an adequate number of rate or price quotations was obtained from qualified sources for one small purchase expenditure reviewed. In addition, a sample of 40 covered transactions was randomly selected for testing using a nonstatistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and if suspension and debarment compliance requirements were met. The following exception was noted: For two expenditures, documentation could not be provided to support the entity’s verification that the vendor was not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: Upon testing a sample of $13,307.47 in procurement transactions, known questioned costs of $474.00 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $1,363,942.86 in procurement transactions, we project the likely questioned costs to be approximately $48,623.00. Cause: The School District did not follow its policies and procedures that govern the procurement process for federal programs. Effect: The School District is not in compliance with the Uniform Guidance and Georgia Department of Education guidance. Failure to appropriately implement procedures to address procurement compliance requirements could result in the expenditure of federal funds with unqualified vendors and the return of grant funds associated with these unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement methods are properly identified and followed. Furthermore, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
FA 2022-002 Improve Controls over Procurement and Suspension and Debarment Compliance Requirement: 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 Number: 225GA324N1199 (Year: 2022) Questioned Costs: $474.00 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 the School District’s procurement procedures were followed. Background: 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 $2,764,279.02 were expended and reported on the Monroe County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. 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. 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.” Furthermore, Title 2 CFR Section 180.300 states in part that the non-Federal entity must “verify that the entity with whom you intend to do business is not excluded or disqualified. You can do this by: (a) Checking System for Awards Management (SAM) exclusions; or (b) Collecting a certification from the entity; or (c) Adding a clause or condition to the covered transaction with the entity.” Condition: A sample of 40 procurement transactions 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 procurement compliance requirements were met. The following deficiencies were noted: The appropriate procurement method was not used for the dollar amount and conditions associated with one procurement transaction. The School District could not provide evidence that an adequate number of rate or price quotations was obtained from qualified sources for one small purchase expenditure reviewed. In addition, a sample of 40 covered transactions was randomly selected for testing using a nonstatistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and if suspension and debarment compliance requirements were met. The following exception was noted: For two expenditures, documentation could not be provided to support the entity’s verification that the vendor was not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: Upon testing a sample of $13,307.47 in procurement transactions, known questioned costs of $474.00 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $1,363,942.86 in procurement transactions, we project the likely questioned costs to be approximately $48,623.00. Cause: The School District did not follow its policies and procedures that govern the procurement process for federal programs. Effect: The School District is not in compliance with the Uniform Guidance and Georgia Department of Education guidance. Failure to appropriately implement procedures to address procurement compliance requirements could result in the expenditure of federal funds with unqualified vendors and the return of grant funds associated with these unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement methods are properly identified and followed. Furthermore, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
FA 2022-002 Improve Controls over Procurement and Suspension and Debarment Compliance Requirement: 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 Number: 225GA324N1199 (Year: 2022) Questioned Costs: $474.00 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 the School District’s procurement procedures were followed. Background: 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 $2,764,279.02 were expended and reported on the Monroe County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. 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. 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.” Furthermore, Title 2 CFR Section 180.300 states in part that the non-Federal entity must “verify that the entity with whom you intend to do business is not excluded or disqualified. You can do this by: (a) Checking System for Awards Management (SAM) exclusions; or (b) Collecting a certification from the entity; or (c) Adding a clause or condition to the covered transaction with the entity.” Condition: A sample of 40 procurement transactions 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 procurement compliance requirements were met. The following deficiencies were noted: The appropriate procurement method was not used for the dollar amount and conditions associated with one procurement transaction. The School District could not provide evidence that an adequate number of rate or price quotations was obtained from qualified sources for one small purchase expenditure reviewed. In addition, a sample of 40 covered transactions was randomly selected for testing using a nonstatistical sampling approach. These transactions were reviewed to determine if appropriate internal controls were implemented and if suspension and debarment compliance requirements were met. The following exception was noted: For two expenditures, documentation could not be provided to support the entity’s verification that the vendor was not suspended or debarred or otherwise excluded from participating in the transaction. Questioned Costs: Upon testing a sample of $13,307.47 in procurement transactions, known questioned costs of $474.00 were identified for expenditures that did not follow the School District’s procurement procedures. Using the total population of $1,363,942.86 in procurement transactions, we project the likely questioned costs to be approximately $48,623.00. Cause: The School District did not follow its policies and procedures that govern the procurement process for federal programs. Effect: The School District is not in compliance with the Uniform Guidance and Georgia Department of Education guidance. Failure to appropriately implement procedures to address procurement compliance requirements could result in the expenditure of federal funds with unqualified vendors and the return of grant funds associated with these unallowable expenditures. Recommendation: The School District should evaluate and improve internal control procedures to ensure that required procurement methods are properly identified and followed. Furthermore, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
Finding 2022-004 21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria 2 CFR Part 200.320(a)(2)(i) indicates “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Condition Documentation was not maintained by the County demonstrating price or rate quotations were received for the purchase of a piece of equipment. Cause The County did not maintain documentation of price and rate quotes received. Effect By not obtaining price or rate quotations, the County may pay more for goods and services than is necessary. Questioned Costs $11,000 Recommendations The County should establish and follow procurement policies and procedures to ensure the County adheres to requirements established by the Federal Government. Views of Responsible Officials The County does have procurement policies which, if followed correctly, would have prevailed. Hood River County Fair did go out for the best bid on their project unfortunately, no written documentation was stored. This was a time of transition in staff. Also, this area is mostly volunteers who were not trained. In the future, the County will ensure that everyone working on a Federally funded project is properly trained in grant and procurement policies and procedures.
Finding 2022-004 21.027 - Coronavirus State and Local Fiscal Recovery Funds Criteria 2 CFR Part 200.320(a)(2)(i) indicates “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.” Condition Documentation was not maintained by the County demonstrating price or rate quotations were received for the purchase of a piece of equipment. Cause The County did not maintain documentation of price and rate quotes received. Effect By not obtaining price or rate quotations, the County may pay more for goods and services than is necessary. Questioned Costs $11,000 Recommendations The County should establish and follow procurement policies and procedures to ensure the County adheres to requirements established by the Federal Government. Views of Responsible Officials The County does have procurement policies which, if followed correctly, would have prevailed. Hood River County Fair did go out for the best bid on their project unfortunately, no written documentation was stored. This was a time of transition in staff. Also, this area is mostly volunteers who were not trained. In the future, the County will ensure that everyone working on a Federally funded project is properly trained in grant and procurement policies and procedures.
Identification of federal program: US DEPARTMENT OF EDUCATION, passed through the Indiana Department of Education, Charter Schools Program 84.282A Criteria : In accordance with CFR 200.318(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. In addition, in accordance with CFR 200.318(a) the non- federal entity must have and use documented procurement procedures consistent with federal procurement standards. Condition: Expenditures tested that met the small purchase threshold (purchases with a cost between $10,000 and $250,000) did not have documentation detailing the history of procurement. Cause : The School does not have procurement policies that follow federal guidelines, specifically 2 CFR 200.320 Methods of procurement to be followed. Effect : Property and equipment additions made using federal funds during the year did not have appropriate a support showing procurement policies were followed. Questioned costs: $83,864 Context: Two out of two purchases tested for procurement did not follow federal procurement methods. Recommendation : We recommend that the School institute procurement policies whereby acquisitions follow appropriate procurement steps as required by 2 CRF 200.350 and documentation of procurement decisions is maintained. View of responsible officials : See attached corrective action plan
Federal Agency: Department of Justice CFDA Cluster Nos.: 16.922 Federal Program Cluster: Equitable Sharing Program Compliance Requirement: Procurement, Suspension, and Debarment ? Noncompetitive Procurement (Sole Source Designation), Competition ? Formal Procurement Methods Type of Finding: Material Weakness Questioned Costs: $0 Criteria: 2 CFR 200.318 General Procurement Standards, 2 CFR 200.319 Competition, 2 CFR 200.320 Methods of Procurement to be Followed. (1) All procurement transactions for the acquisition of services required under federal award must be conducted in a manner providing full and open competition in compliance with the standards of section 200.319 and 200.320. Additionally, in compliance with the standards of section 200.320 (c) (2) Noncompetitive procurement, there are specific circumstances in which noncompetitive procurement can be used.
Federal Agency: U.S. Department of Energy, Bonneville Power Administration Federal Program Name: Columbia Basin Pit Tag Assistance Listing Number: 81.999 Federal Award Identification Number and Year: 00078040 REL 35 ? 2021-2022 Award Period: July 1, 2021 through June 30, 2022 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. Specifically, per ?200.320(c), noncompetitive procurements can only be used if one of five specific circumstances are met. Documentation for that assessment must be kept. The Commission should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted the Commission did not have adequate internal controls designed to ensure noncompetitive procurements were appropriately identified as sole source procurements. Questioned costs: $134,084 Context: In a statistically valid sample, two of seven procurement selections tested, representing 50% of the noncompetitive procurements tested, did not have sufficient documentation to appropriately determine that the procurements qualified as sole source acquisitions. Upon further review of the procurements in question, they did appear to merit the use of sole source procurement, however incomplete documentation was kept to identify the procurements as such. Cause: The selections in questions were for renewals of software agreements. Sole source justification may have been completed on the initial contracts and purchases, however these documents were either not retained or were inaccessible during the audit. Effect: Noncompliance could lead the Commission to enter into contracts with vendors that are not the most suitable for the goods and/or services being procured. Repeat Finding: No Recommendation: We recommend the Commission design controls to ensure adequate documentation is maintained to support sole source justifications. Views of responsible officials: There is no disagreement with the audit finding.
2022?003 Procurement, Suspension, and Debarment Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553,10.555 Pass-Through-Agency: Wisconsin Department of Public Instruction Pass-Through-Numbers: 2022-312814-DPI-SB-SEVERE-546, 2022-312814-DPI-SB-546, 2022-312814-DPI-NSL-547 Award Period 07/01/2021-06/30/2022 Type of Finding: ? Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2). Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from and adequate number of qualified offerors. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: During our testing of procurement transactions of the program we noted two transactions over the District's Small Purchase threshold where an adequate number of quotes was not obtained. Additionally, we noted the district did not keep documentation of verifying suspension and debarment status for one contract. Questioned Costs: $36,052. Context: During our testing of procurement transactions of the program we noted two transactions over the District's Small Purchase threshold where an adequate number of quotes was not obtained. Additionally, we noted the district did not keep documentation of verifying suspension and debarment status for one contract. Cause: The District did not follow their Federal Funds Procurement- Federal Grants/Funds related to appropriate methods of procurement and suspension and debarment. Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the fiscally responsible way. The lack of price quotes may cause the District to overpay for supplies or services. Additionally, not verifying that an entity is not debarred or suspended could result in entering covered transactions with debarred or suspended vendors. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the District follow their procurement and suspension and debarment policy related to small purchases which includes obtaining price quotes form and adequate number of vendors (at least two), and suspension and debarment policy for verifying vendors and maintaining this documentation. Views of responsible officials: There is no disagreement with finding.
2022?003 Procurement, Suspension, and Debarment Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553,10.555 Pass-Through-Agency: Wisconsin Department of Public Instruction Pass-Through-Numbers: 2022-312814-DPI-SB-SEVERE-546, 2022-312814-DPI-SB-546, 2022-312814-DPI-NSL-547 Award Period 07/01/2021-06/30/2022 Type of Finding: ? Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2). Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from and adequate number of qualified offerors. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: During our testing of procurement transactions of the program we noted two transactions over the District's Small Purchase threshold where an adequate number of quotes was not obtained. Additionally, we noted the district did not keep documentation of verifying suspension and debarment status for one contract. Questioned Costs: $36,052. Context: During our testing of procurement transactions of the program we noted two transactions over the District's Small Purchase threshold where an adequate number of quotes was not obtained. Additionally, we noted the district did not keep documentation of verifying suspension and debarment status for one contract. Cause: The District did not follow their Federal Funds Procurement- Federal Grants/Funds related to appropriate methods of procurement and suspension and debarment. Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the fiscally responsible way. The lack of price quotes may cause the District to overpay for supplies or services. Additionally, not verifying that an entity is not debarred or suspended could result in entering covered transactions with debarred or suspended vendors. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the District follow their procurement and suspension and debarment policy related to small purchases which includes obtaining price quotes form and adequate number of vendors (at least two), and suspension and debarment policy for verifying vendors and maintaining this documentation. Views of responsible officials: There is no disagreement with finding.
2022?003 Procurement, Suspension, and Debarment Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553,10.555 Pass-Through-Agency: Wisconsin Department of Public Instruction Pass-Through-Numbers: 2022-312814-DPI-SB-SEVERE-546, 2022-312814-DPI-SB-546, 2022-312814-DPI-NSL-547 Award Period 07/01/2021-06/30/2022 Type of Finding: ? Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2). Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from and adequate number of qualified offerors. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: During our testing of procurement transactions of the program we noted two transactions over the District's Small Purchase threshold where an adequate number of quotes was not obtained. Additionally, we noted the district did not keep documentation of verifying suspension and debarment status for one contract. Questioned Costs: $36,052. Context: During our testing of procurement transactions of the program we noted two transactions over the District's Small Purchase threshold where an adequate number of quotes was not obtained. Additionally, we noted the district did not keep documentation of verifying suspension and debarment status for one contract. Cause: The District did not follow their Federal Funds Procurement- Federal Grants/Funds related to appropriate methods of procurement and suspension and debarment. Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the fiscally responsible way. The lack of price quotes may cause the District to overpay for supplies or services. Additionally, not verifying that an entity is not debarred or suspended could result in entering covered transactions with debarred or suspended vendors. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the District follow their procurement and suspension and debarment policy related to small purchases which includes obtaining price quotes form and adequate number of vendors (at least two), and suspension and debarment policy for verifying vendors and maintaining this documentation. Views of responsible officials: There is no disagreement with finding.
2022?003 Procurement, Suspension, and Debarment Federal Agency: United States Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Number: 10.553,10.555 Pass-Through-Agency: Wisconsin Department of Public Instruction Pass-Through-Numbers: 2022-312814-DPI-SB-SEVERE-546, 2022-312814-DPI-SB-546, 2022-312814-DPI-NSL-547 Award Period 07/01/2021-06/30/2022 Type of Finding: ? Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: 2 CFR 200.320 Methods of Procurement state that if the small purchases method is used, price or rate quotations must be obtained from an adequate number of qualified sources (at least 2). Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Proposals must be solicited from and adequate number of qualified offerors. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: During our testing of procurement transactions of the program we noted two transactions over the District's Small Purchase threshold where an adequate number of quotes was not obtained. Additionally, we noted the district did not keep documentation of verifying suspension and debarment status for one contract. Questioned Costs: $36,052. Context: During our testing of procurement transactions of the program we noted two transactions over the District's Small Purchase threshold where an adequate number of quotes was not obtained. Additionally, we noted the district did not keep documentation of verifying suspension and debarment status for one contract. Cause: The District did not follow their Federal Funds Procurement- Federal Grants/Funds related to appropriate methods of procurement and suspension and debarment. Effect: Obtaining price quotes and proposals from an adequate number of vendors allows the District to use federal funds in the fiscally responsible way. The lack of price quotes may cause the District to overpay for supplies or services. Additionally, not verifying that an entity is not debarred or suspended could result in entering covered transactions with debarred or suspended vendors. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the District follow their procurement and suspension and debarment policy related to small purchases which includes obtaining price quotes form and adequate number of vendors (at least two), and suspension and debarment policy for verifying vendors and maintaining this documentation. Views of responsible officials: There is no disagreement with finding.
U.S. Department of Agriculture Passed through Michigan Department of Education Child Nutrition Cluster ? COVID-19 School Breakfast Program #10.553, National School Lunch Program #10.555, Summer Food Service Program for Children #10.559 #2022-002: Material Weakness in Controls over Compliance: Administrative Requirements of Uniform Guidance ? Administrative Policies This is a repeat of prior year finding #2021-002 Conditions and Criteria: Written policies associated with financial management, allowable costs, cash management and procurement do not meet the administrative requirements of Uniform Guidance (2 CFR 200). Cause/Context: Grand Rapids Christian Schools has written policies and procedures contained within the Schools? Policy Manual and the Accounting Procedures Manual that apply to the operations and administration of the Schools. Certain of these policies and procedures cover activities relevant to the federal awards programs and address some of the direct and material compliance matters important to the major federal program. However, the Schools has not adopted the policy requirements of Uniform Guidance related to financial management, allowable costs, cash management and procurement that apply to its federal programs. Recommendations: Grand Rapids Christian Schools should adopt the following written policies as required by Uniform Guidance: ?Financial Management (2 CFR 200.302) The financial management policy should include records documenting compliance, and the tracking of funds to determine that expenditures are in accordance with the terms and conditions of the federal awards. The financial management and reporting system must provide the following: ?Identification - Title of the award, federal assistance number ?Complete disclosure of accurate and current financial results of each federal award ?Source and application of funds for federal award activity ?Record retention and access ? define the time period for which records must be kept (can vary by grant agreement), and who has the ability to access the records (?200.333 - ?200.337) ?Written procedure to implement cash management requirements (see below) ?Written procedures for determining the allowability of costs (see below) ?Cash Management (2 CFR 200.305) A written policy is required by Uniform Guidance detailing the Schools? procedures to minimize the time that elapses between draw and expenditure of federal dollars. ?Allowable Costs (2 CFR 200.302(b)(7)) The Schools must have written procedures for determining the allowability of costs in accordance with Subpart E - Cost Principles of Uniform Guidance and the terms and conditions of the Federal award. This includes the determination of allowable costs and the review of this determination. The standard assumes policies and procedures are in place for disbursements, and the allowable cost policy will demonstrate how the School ensures compliance. The criteria for costs to be considered allowable are documented within 2 CFR 200.403. ?Procurement Standards (2 CFR 200.317 ? 200.326) The School must have and use documented procurement procedures, including written standards that promote full and open vendor competition. Written conflict of interest standards must cover the actions of employees engaged in the selection, award and administration of contracts. Methods included in written standards covering the acquisition of property or services under a Federal award or sub-award must be consistent with specific thresholds as set forth in CFR 200.320. There are five allowable procurement methods described in ?200.320, depending upon the dollar value of the purchase or contract. Views of Responsible Officials and Planned Corrective Actions: ?Grand Rapids Christian Schools follows procurement and record retention standards provided by the USDA. ?GRCS does not have actual written policies and procedures for Financial Management, Cash Management, Allowable Costs, and Procurement Standards, but do have practices in place to follow USDA guidelines. In the case of cash management, the only location that takes cash is GRCHS. In that instance, along with Meal Magic, cash registers are zeroed out and balanced to Meal Magic and cash deposits are made daily. ?GRCS Business Office will work with the Food Service Director to begin formulating written policies and procedures specific to Grand Rapids Christian Schools. GRCS will utilize the resources from Uniform Guidance and the Code of Federal Regulations (CFR) to develop policies that are compliant with those requirements prior to June 30, 2023.
U.S. Department of Agriculture Passed through Michigan Department of Education Child Nutrition Cluster ? COVID-19 School Breakfast Program #10.553, National School Lunch Program #10.555, Summer Food Service Program for Children #10.559 #2022-004 ? Compliance Finding - Procurement Conditions and Criteria: Three transactions were selected for testing that exceeded the threshold for small purchases defined by procurement standards in 2 CFR 200.320(a). Specifically, the transactions were above the micro-purchase threshold (currently $10,000) but below the simplified acquisition threshold (currently $250,000), and the transactions qualified as small purchases. The regulations in 2 CFR 200(a)(2) require price or rate quotations be obtained from an adequate number of qualified sources. Cause: The Schools does not currently have a procurement policy that contains the requirements outlined in the regulations defined above. Context: The transactions relevant to this finding are associated with the renovation of the middle school kitchen and the purchase of related food service and kitchen equipment that exceeded the micro purchases threshold. These transactions individually qualify as small purchases (under $250,000) and require at least competitive pricing or quotes. The transactions tested total approximately $353,500, and represent the population of purchases that met this threshold during the year. Competitive quotes were not solicited. Rather, GRCS contracted with the providers recommended by management. Management explained that the contractor selected for construction previously renovated the school, and understood the scope and complexities of the project. Management also explained that the project had a very tight deadline due to the start of school and arrival of students. Further, a shortage of labor and capacity in the local construction industry was observed by management, limiting the number of contractors willing and able to commit to the scope and deadlines of the project. For these reasons, management explained that it was impractical to obtain bids/quotes. Recommendations: We recommend that Grand Rapids Christian Schools establish and follow written procurement standards that comply with the requirements of Uniform Guidance and 2 CFR 200.320. Views of Responsible Officials and Planned Corrective Actions: ? The GRCMS kitchen renovation needed to be completed quickly over the summer of 2022, and in time for the start of the 2022-23 school year (August 16, 2022). As a result, Grand Rapids Christian did not solicit quotes and contracted with Rockford Construction, who was the contractor for the GRCMS building renovation in 2014. ? GRCS will develop established written procurement standards and, when appropriate, will follow them for future projects. GRCS will utilize the resources from Uniform Guidance and 2 CFR 200 to develop a policy that is in compliance with the those requirements prior to June 30, 2023.
U.S. Department of Agriculture Passed through Michigan Department of Education Child Nutrition Cluster ? COVID-19 School Breakfast Program #10.553, National School Lunch Program #10.555, Summer Food Service Program for Children #10.559 #2022-002: Material Weakness in Controls over Compliance: Administrative Requirements of Uniform Guidance ? Administrative Policies This is a repeat of prior year finding #2021-002 Conditions and Criteria: Written policies associated with financial management, allowable costs, cash management and procurement do not meet the administrative requirements of Uniform Guidance (2 CFR 200). Cause/Context: Grand Rapids Christian Schools has written policies and procedures contained within the Schools? Policy Manual and the Accounting Procedures Manual that apply to the operations and administration of the Schools. Certain of these policies and procedures cover activities relevant to the federal awards programs and address some of the direct and material compliance matters important to the major federal program. However, the Schools has not adopted the policy requirements of Uniform Guidance related to financial management, allowable costs, cash management and procurement that apply to its federal programs. Recommendations: Grand Rapids Christian Schools should adopt the following written policies as required by Uniform Guidance: ?Financial Management (2 CFR 200.302) The financial management policy should include records documenting compliance, and the tracking of funds to determine that expenditures are in accordance with the terms and conditions of the federal awards. The financial management and reporting system must provide the following: ?Identification - Title of the award, federal assistance number ?Complete disclosure of accurate and current financial results of each federal award ?Source and application of funds for federal award activity ?Record retention and access ? define the time period for which records must be kept (can vary by grant agreement), and who has the ability to access the records (?200.333 - ?200.337) ?Written procedure to implement cash management requirements (see below) ?Written procedures for determining the allowability of costs (see below) ?Cash Management (2 CFR 200.305) A written policy is required by Uniform Guidance detailing the Schools? procedures to minimize the time that elapses between draw and expenditure of federal dollars. ?Allowable Costs (2 CFR 200.302(b)(7)) The Schools must have written procedures for determining the allowability of costs in accordance with Subpart E - Cost Principles of Uniform Guidance and the terms and conditions of the Federal award. This includes the determination of allowable costs and the review of this determination. The standard assumes policies and procedures are in place for disbursements, and the allowable cost policy will demonstrate how the School ensures compliance. The criteria for costs to be considered allowable are documented within 2 CFR 200.403. ?Procurement Standards (2 CFR 200.317 ? 200.326) The School must have and use documented procurement procedures, including written standards that promote full and open vendor competition. Written conflict of interest standards must cover the actions of employees engaged in the selection, award and administration of contracts. Methods included in written standards covering the acquisition of property or services under a Federal award or sub-award must be consistent with specific thresholds as set forth in CFR 200.320. There are five allowable procurement methods described in ?200.320, depending upon the dollar value of the purchase or contract. Views of Responsible Officials and Planned Corrective Actions: ?Grand Rapids Christian Schools follows procurement and record retention standards provided by the USDA. ?GRCS does not have actual written policies and procedures for Financial Management, Cash Management, Allowable Costs, and Procurement Standards, but do have practices in place to follow USDA guidelines. In the case of cash management, the only location that takes cash is GRCHS. In that instance, along with Meal Magic, cash registers are zeroed out and balanced to Meal Magic and cash deposits are made daily. ?GRCS Business Office will work with the Food Service Director to begin formulating written policies and procedures specific to Grand Rapids Christian Schools. GRCS will utilize the resources from Uniform Guidance and the Code of Federal Regulations (CFR) to develop policies that are compliant with those requirements prior to June 30, 2023.
U.S. Department of Agriculture Passed through Michigan Department of Education Child Nutrition Cluster ? COVID-19 School Breakfast Program #10.553, National School Lunch Program #10.555, Summer Food Service Program for Children #10.559 #2022-004 ? Compliance Finding - Procurement Conditions and Criteria: Three transactions were selected for testing that exceeded the threshold for small purchases defined by procurement standards in 2 CFR 200.320(a). Specifically, the transactions were above the micro-purchase threshold (currently $10,000) but below the simplified acquisition threshold (currently $250,000), and the transactions qualified as small purchases. The regulations in 2 CFR 200(a)(2) require price or rate quotations be obtained from an adequate number of qualified sources. Cause: The Schools does not currently have a procurement policy that contains the requirements outlined in the regulations defined above. Context: The transactions relevant to this finding are associated with the renovation of the middle school kitchen and the purchase of related food service and kitchen equipment that exceeded the micro purchases threshold. These transactions individually qualify as small purchases (under $250,000) and require at least competitive pricing or quotes. The transactions tested total approximately $353,500, and represent the population of purchases that met this threshold during the year. Competitive quotes were not solicited. Rather, GRCS contracted with the providers recommended by management. Management explained that the contractor selected for construction previously renovated the school, and understood the scope and complexities of the project. Management also explained that the project had a very tight deadline due to the start of school and arrival of students. Further, a shortage of labor and capacity in the local construction industry was observed by management, limiting the number of contractors willing and able to commit to the scope and deadlines of the project. For these reasons, management explained that it was impractical to obtain bids/quotes. Recommendations: We recommend that Grand Rapids Christian Schools establish and follow written procurement standards that comply with the requirements of Uniform Guidance and 2 CFR 200.320. Views of Responsible Officials and Planned Corrective Actions: ? The GRCMS kitchen renovation needed to be completed quickly over the summer of 2022, and in time for the start of the 2022-23 school year (August 16, 2022). As a result, Grand Rapids Christian did not solicit quotes and contracted with Rockford Construction, who was the contractor for the GRCMS building renovation in 2014. ? GRCS will develop established written procurement standards and, when appropriate, will follow them for future projects. GRCS will utilize the resources from Uniform Guidance and 2 CFR 200 to develop a policy that is in compliance with the those requirements prior to June 30, 2023.
U.S. Department of Agriculture Passed through Michigan Department of Education Child Nutrition Cluster ? COVID-19 School Breakfast Program #10.553, National School Lunch Program #10.555, Summer Food Service Program for Children #10.559 #2022-002: Material Weakness in Controls over Compliance: Administrative Requirements of Uniform Guidance ? Administrative Policies This is a repeat of prior year finding #2021-002 Conditions and Criteria: Written policies associated with financial management, allowable costs, cash management and procurement do not meet the administrative requirements of Uniform Guidance (2 CFR 200). Cause/Context: Grand Rapids Christian Schools has written policies and procedures contained within the Schools? Policy Manual and the Accounting Procedures Manual that apply to the operations and administration of the Schools. Certain of these policies and procedures cover activities relevant to the federal awards programs and address some of the direct and material compliance matters important to the major federal program. However, the Schools has not adopted the policy requirements of Uniform Guidance related to financial management, allowable costs, cash management and procurement that apply to its federal programs. Recommendations: Grand Rapids Christian Schools should adopt the following written policies as required by Uniform Guidance: ?Financial Management (2 CFR 200.302) The financial management policy should include records documenting compliance, and the tracking of funds to determine that expenditures are in accordance with the terms and conditions of the federal awards. The financial management and reporting system must provide the following: ?Identification - Title of the award, federal assistance number ?Complete disclosure of accurate and current financial results of each federal award ?Source and application of funds for federal award activity ?Record retention and access ? define the time period for which records must be kept (can vary by grant agreement), and who has the ability to access the records (?200.333 - ?200.337) ?Written procedure to implement cash management requirements (see below) ?Written procedures for determining the allowability of costs (see below) ?Cash Management (2 CFR 200.305) A written policy is required by Uniform Guidance detailing the Schools? procedures to minimize the time that elapses between draw and expenditure of federal dollars. ?Allowable Costs (2 CFR 200.302(b)(7)) The Schools must have written procedures for determining the allowability of costs in accordance with Subpart E - Cost Principles of Uniform Guidance and the terms and conditions of the Federal award. This includes the determination of allowable costs and the review of this determination. The standard assumes policies and procedures are in place for disbursements, and the allowable cost policy will demonstrate how the School ensures compliance. The criteria for costs to be considered allowable are documented within 2 CFR 200.403. ?Procurement Standards (2 CFR 200.317 ? 200.326) The School must have and use documented procurement procedures, including written standards that promote full and open vendor competition. Written conflict of interest standards must cover the actions of employees engaged in the selection, award and administration of contracts. Methods included in written standards covering the acquisition of property or services under a Federal award or sub-award must be consistent with specific thresholds as set forth in CFR 200.320. There are five allowable procurement methods described in ?200.320, depending upon the dollar value of the purchase or contract. Views of Responsible Officials and Planned Corrective Actions: ?Grand Rapids Christian Schools follows procurement and record retention standards provided by the USDA. ?GRCS does not have actual written policies and procedures for Financial Management, Cash Management, Allowable Costs, and Procurement Standards, but do have practices in place to follow USDA guidelines. In the case of cash management, the only location that takes cash is GRCHS. In that instance, along with Meal Magic, cash registers are zeroed out and balanced to Meal Magic and cash deposits are made daily. ?GRCS Business Office will work with the Food Service Director to begin formulating written policies and procedures specific to Grand Rapids Christian Schools. GRCS will utilize the resources from Uniform Guidance and the Code of Federal Regulations (CFR) to develop policies that are compliant with those requirements prior to June 30, 2023.
U.S. Department of Agriculture Passed through Michigan Department of Education Child Nutrition Cluster ? COVID-19 School Breakfast Program #10.553, National School Lunch Program #10.555, Summer Food Service Program for Children #10.559 #2022-004 ? Compliance Finding - Procurement Conditions and Criteria: Three transactions were selected for testing that exceeded the threshold for small purchases defined by procurement standards in 2 CFR 200.320(a). Specifically, the transactions were above the micro-purchase threshold (currently $10,000) but below the simplified acquisition threshold (currently $250,000), and the transactions qualified as small purchases. The regulations in 2 CFR 200(a)(2) require price or rate quotations be obtained from an adequate number of qualified sources. Cause: The Schools does not currently have a procurement policy that contains the requirements outlined in the regulations defined above. Context: The transactions relevant to this finding are associated with the renovation of the middle school kitchen and the purchase of related food service and kitchen equipment that exceeded the micro purchases threshold. These transactions individually qualify as small purchases (under $250,000) and require at least competitive pricing or quotes. The transactions tested total approximately $353,500, and represent the population of purchases that met this threshold during the year. Competitive quotes were not solicited. Rather, GRCS contracted with the providers recommended by management. Management explained that the contractor selected for construction previously renovated the school, and understood the scope and complexities of the project. Management also explained that the project had a very tight deadline due to the start of school and arrival of students. Further, a shortage of labor and capacity in the local construction industry was observed by management, limiting the number of contractors willing and able to commit to the scope and deadlines of the project. For these reasons, management explained that it was impractical to obtain bids/quotes. Recommendations: We recommend that Grand Rapids Christian Schools establish and follow written procurement standards that comply with the requirements of Uniform Guidance and 2 CFR 200.320. Views of Responsible Officials and Planned Corrective Actions: ? The GRCMS kitchen renovation needed to be completed quickly over the summer of 2022, and in time for the start of the 2022-23 school year (August 16, 2022). As a result, Grand Rapids Christian did not solicit quotes and contracted with Rockford Construction, who was the contractor for the GRCMS building renovation in 2014. ? GRCS will develop established written procurement standards and, when appropriate, will follow them for future projects. GRCS will utilize the resources from Uniform Guidance and 2 CFR 200 to develop a policy that is in compliance with the those requirements prior to June 30, 2023.
U.S. Department of Agriculture Passed through Michigan Department of Education Child Nutrition Cluster ? COVID-19 School Breakfast Program #10.553, National School Lunch Program #10.555, Summer Food Service Program for Children #10.559 #2022-002: Material Weakness in Controls over Compliance: Administrative Requirements of Uniform Guidance ? Administrative Policies This is a repeat of prior year finding #2021-002 Conditions and Criteria: Written policies associated with financial management, allowable costs, cash management and procurement do not meet the administrative requirements of Uniform Guidance (2 CFR 200). Cause/Context: Grand Rapids Christian Schools has written policies and procedures contained within the Schools? Policy Manual and the Accounting Procedures Manual that apply to the operations and administration of the Schools. Certain of these policies and procedures cover activities relevant to the federal awards programs and address some of the direct and material compliance matters important to the major federal program. However, the Schools has not adopted the policy requirements of Uniform Guidance related to financial management, allowable costs, cash management and procurement that apply to its federal programs. Recommendations: Grand Rapids Christian Schools should adopt the following written policies as required by Uniform Guidance: ?Financial Management (2 CFR 200.302) The financial management policy should include records documenting compliance, and the tracking of funds to determine that expenditures are in accordance with the terms and conditions of the federal awards. The financial management and reporting system must provide the following: ?Identification - Title of the award, federal assistance number ?Complete disclosure of accurate and current financial results of each federal award ?Source and application of funds for federal award activity ?Record retention and access ? define the time period for which records must be kept (can vary by grant agreement), and who has the ability to access the records (?200.333 - ?200.337) ?Written procedure to implement cash management requirements (see below) ?Written procedures for determining the allowability of costs (see below) ?Cash Management (2 CFR 200.305) A written policy is required by Uniform Guidance detailing the Schools? procedures to minimize the time that elapses between draw and expenditure of federal dollars. ?Allowable Costs (2 CFR 200.302(b)(7)) The Schools must have written procedures for determining the allowability of costs in accordance with Subpart E - Cost Principles of Uniform Guidance and the terms and conditions of the Federal award. This includes the determination of allowable costs and the review of this determination. The standard assumes policies and procedures are in place for disbursements, and the allowable cost policy will demonstrate how the School ensures compliance. The criteria for costs to be considered allowable are documented within 2 CFR 200.403. ?Procurement Standards (2 CFR 200.317 ? 200.326) The School must have and use documented procurement procedures, including written standards that promote full and open vendor competition. Written conflict of interest standards must cover the actions of employees engaged in the selection, award and administration of contracts. Methods included in written standards covering the acquisition of property or services under a Federal award or sub-award must be consistent with specific thresholds as set forth in CFR 200.320. There are five allowable procurement methods described in ?200.320, depending upon the dollar value of the purchase or contract. Views of Responsible Officials and Planned Corrective Actions: ?Grand Rapids Christian Schools follows procurement and record retention standards provided by the USDA. ?GRCS does not have actual written policies and procedures for Financial Management, Cash Management, Allowable Costs, and Procurement Standards, but do have practices in place to follow USDA guidelines. In the case of cash management, the only location that takes cash is GRCHS. In that instance, along with Meal Magic, cash registers are zeroed out and balanced to Meal Magic and cash deposits are made daily. ?GRCS Business Office will work with the Food Service Director to begin formulating written policies and procedures specific to Grand Rapids Christian Schools. GRCS will utilize the resources from Uniform Guidance and the Code of Federal Regulations (CFR) to develop policies that are compliant with those requirements prior to June 30, 2023.
U.S. Department of Agriculture Passed through Michigan Department of Education Child Nutrition Cluster ? COVID-19 School Breakfast Program #10.553, National School Lunch Program #10.555, Summer Food Service Program for Children #10.559 #2022-004 ? Compliance Finding - Procurement Conditions and Criteria: Three transactions were selected for testing that exceeded the threshold for small purchases defined by procurement standards in 2 CFR 200.320(a). Specifically, the transactions were above the micro-purchase threshold (currently $10,000) but below the simplified acquisition threshold (currently $250,000), and the transactions qualified as small purchases. The regulations in 2 CFR 200(a)(2) require price or rate quotations be obtained from an adequate number of qualified sources. Cause: The Schools does not currently have a procurement policy that contains the requirements outlined in the regulations defined above. Context: The transactions relevant to this finding are associated with the renovation of the middle school kitchen and the purchase of related food service and kitchen equipment that exceeded the micro purchases threshold. These transactions individually qualify as small purchases (under $250,000) and require at least competitive pricing or quotes. The transactions tested total approximately $353,500, and represent the population of purchases that met this threshold during the year. Competitive quotes were not solicited. Rather, GRCS contracted with the providers recommended by management. Management explained that the contractor selected for construction previously renovated the school, and understood the scope and complexities of the project. Management also explained that the project had a very tight deadline due to the start of school and arrival of students. Further, a shortage of labor and capacity in the local construction industry was observed by management, limiting the number of contractors willing and able to commit to the scope and deadlines of the project. For these reasons, management explained that it was impractical to obtain bids/quotes. Recommendations: We recommend that Grand Rapids Christian Schools establish and follow written procurement standards that comply with the requirements of Uniform Guidance and 2 CFR 200.320. Views of Responsible Officials and Planned Corrective Actions: ? The GRCMS kitchen renovation needed to be completed quickly over the summer of 2022, and in time for the start of the 2022-23 school year (August 16, 2022). As a result, Grand Rapids Christian did not solicit quotes and contracted with Rockford Construction, who was the contractor for the GRCMS building renovation in 2014. ? GRCS will develop established written procurement standards and, when appropriate, will follow them for future projects. GRCS will utilize the resources from Uniform Guidance and 2 CFR 200 to develop a policy that is in compliance with the those requirements prior to June 30, 2023.