Findings Citing § 200.321

SCHEDULE OF FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Port of Woodland January 1, 2024 through December 31, 2024 2024-001 The Port did not have adequate internal controls and did not comply with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: COVID 19 - 21.029 – Coronavirus Capital Projects Fund Federal Grantor Name: U.S. Department of Treasury Federal Award/Contract Number: N/A Pass-through Entity Name: Washington State Department of Commerce Pass-through Award/Contract Number: S21-96401-023 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The purpose of the COVID-19 Coronavirus Capital Projects Fund is to fund multi-purpose community centers and broadband-related infrastructure projects designed to deliver reliable internet service that meets or exceeds 100/100 Mbps symmetrical speeds. In 2024, the Port expended $1,327,754 related to broadband-related infrastructure. Federal regulations require recipients to establish, document and maintain effective internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Suspension and Debarment Federal requirements prohibit grant recipients from contracting with or purchasing from parties suspended or debarred from doing business with the federal government. Whenever the Port enters into contracts or purchases goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that the contractors are not suspended, debarred or otherwise excluded from participating in federal programs. The Port may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The Port must perform this verification before entering into the contract, and it must maintain documentation demonstrating compliance with this federal requirement. Procurement Federal regulations require recipients to follow their own documented procurement procedures, which must conform to the Uniform Guidance procurement standards found in 2 CFR § 200.318-327. These procedures must reflect the most restrictive of applicable federal, state or local thresholds and methods. When using federal funds to procure goods and services, governments must apply the more restrictive requirements of federal, state or local laws by obtaining quotes or following a competitive procurement process, depending on the estimated cost of the procurement activity. The Port must maintain documentation showing the procurement process it performed. Additionally, federal regulations require recipients to maintain written standards of conduct that cover conflicts of interest and govern the actions of employees and officers involved in selecting, awarding and administering contracts procured with federal funds. Finally, federal regulations require nonfederal entities to incorporate the Build America, Buy America Act (BABAA) preference requirements in all applicable contracts and purchase orders for work performed or products supplied under a federal award with an infrastructure project. Nonfederal entities can meet this requirement by including the BABAA domestic preference provisions in the agreement or obtaining a BABAA waiver. Description of Condition Suspension and Debarment Although the Port has a process to verify the suspension and debarment status for contractors it pays more than $25,000, our audit found the Port did not follow this process and did not verify all five contractors were not suspended or debarred before purchasing from them. Procurement Our audit found the Port’s internal controls were ineffective for ensuring it complied with federal procurement requirements. Although the Port has an established procurement policy, it does not conform with federal requirements. Specifically, it does not include methods and thresholds for purchases, the correct thresholds for public works projects, and requirements included in 2 CFR § 200.321-327. Further, the Port does not have a standards of conduct policy covering conflicts of interest for employees or agents who award contracts, as federal regulations require. Additionally, the Port did not have a process to ensure it followed the most restrictive of federal, state or local procurement requirements when procuring a professional service firm for about $19,750. Finally, the Port did not have a process in place to ensure it included the BABAA preference requirements in all applicable contracts for work performed or products supplied to the infrastructure project. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition Since the District does not regularly manage federal funds, staff were unaware of the applicable federal requirements. In addition, the project was funded by multiple sources that each had their own requirements, which further added to the complexity of ensuring compliance. Effect of Condition Suspension and Debarment The Port did not obtain written certification from the contractors, insert a clause into the contract or retain evidence that it checked for exclusion records at SAM.gov to verify contractors it paid $1,226,616 using federal funds were not suspended or debarred before contracting. Without adequate internal controls, the Port increases its risk of awarding federal funds to contractors that are excluded from participating in federal programs. Any payments the Port made to an ineligible party would be unallowable, and the federal agency could potentially recover them. We subsequently verified the contractors were not suspended or debarred. Therefore, we are not questioning costs. Procurement Without written policies and procedures that conform to federal procurement standards, the Port increases its risk of not complying with standards of conduct requirements when using federal funds. Additionally, without effective internal controls, the Port cannot demonstrate it complied with federal procurement standards, allowed for full and open competition, received the best price or selected the most qualified contractor, and that federal funds were spent on American products. Recommendation Suspension and Debarment We recommend the Port strengthen its internal controls to verify all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs and maintain documentation demonstrating compliance with this requirement. Procurement We recommend the Port update and maintain internal controls to comply with federal procurement requirements, including establishing written procurements and standards of conduct procedures that conform to federal procurement standards in Uniform Guidance (2 CFR 200.318-327). We also recommend the Port establish internal controls to ensure that contracts include the BABAA under a federal award with an infrastructure project, include the BABAA domestic preference provisions in the agreement, or obtain a BABAA waiver. Port’s Response The Port of Woodland thanks the Washington State Auditor’s Office (SAO) for a thorough review of our financial statements and compliance with federal procurement requirements related to the port’s capital infrastructure program. The Port respects the findings of SAO and will implement the recommendations, including improving adequate internal controls related to procurement policies, implementing processes where necessary, and training staff designed to comply with Title 2 U.S Code of Federal Regulations (CFR) Part 180, Part 184, Part 200, and other guidance accepted as best practice for compliance audits. Concerning SAO’s findings related to 2 CFR Part 180, verification of suspension and debarment status of contractors, the Port can state with confidence that none of the contractors were suspended or debarred from participating in federal programs for the duration of their contract with the Port. The Port concurs that it was unable to produce a time-stamped verification that these checks occurred before contract award. The Port will implement new procedures that conform to the Port’s existing policy to verify suspension and debarment status of all applicable contractors in the future. This includes performing verification, modifying future contract language, and retaining evidence of verification. Regarding SAO’s recommendations, designed to ensure the Port complies with federal procurement requirements, the Port intends to review 2 CFR Parts 184 and 200 and modify existing policies and procedures to conform with federal procurement standards. The Port is currently restructuring staffing and work functions, which will provide staff with greater clarity on their specific roles and responsibilities. This will also allow the Port to ensure staff have sufficient training to carry out those responsibilities in accordance with the updated internal controls, including compliance with the Build America, Buy America Act. Auditor’s Remarks We thank the Port for its cooperation throughout the audit and the steps it is taking to address these concerns. We will review the status of the Port’s corrective action during our next audit. Applicable Laws and Regulations 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 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689. Title 2 CFR Part 200, Uniform Guidance, section 318, General procurement standards, establishes requirements for written procedures. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring goods and services, including noncompetitive procurement. Title 2 CFR Part 184, Buy America Preferences for Infrastructure Projects, describes the requirements to purchase iron, steel, manufactured products, and construction materials incorporated into an applicable infrastructure project produced in the United States.

Finding No.: 2024-002 Federal Agency: U.S. Department of Treasury Federal Communications Commission AL Program: COVID-19 21.027 Coronavirus State and Local Fiscal Recovery Funds Requirement: Procurement Questioned Costs: $150,676 Criteria: 2 CFR 200.1, defines State as any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any agency or instrumentality thereof exclusive of local governments. 2 CFR 200.317 requires that when conducting procurement transactions under a Federal award, a State or Indian Tribe must follow the same policies and procedures it uses for procurements with non-Federal funds. If such policies and procedures do not exist, States and Indian Tribes must follow the procurement standards in §§ 200.318 through 200.327. In addition to its own policies and procedures, a State or Indian Tribe must also comply with the following procurement standards: §§ 200.321, 200.322, 200.323, and 200.327. All other recipients and subrecipients, including subrecipients of a State or Indian Tribe, must follow the procurement standards in §§ 200.318 through 200.327. Effective July 1, 2019, GMHA Materials Management Policy and Procedure Manual (Policy No. 4.2) includes the following citations: All supplies, equipment and services purchased by Guam Memorial Hospital Authority (GMHA) shall be in accordance with the provisions of the Guam Procurement Law and GMHA Rules and Regulations as amended. Title 26 of the Guam Administrative Rules and Regulations (GARR) Chapter 16, sets forth as follows: §16308. Methods of Source Selection. Unless otherwise authorized by law, all hospital contracts shall be by competitive sealed bidding, pursuant to §16309 (Competitive Sealed Bidding) of these Regulations, except as provided in: (1) Section 16310 (Procurement from Non Profit Corporations); (2) Section 16311 (Small Purchases); (3) Section 16312 (Sole Source Procurement); (4) Section 16313 (Emergency Procurement); (5) Section 16314 (Competitive Selection Procedures for Services Specified in §16212); (6) Section 16507 (Architect-Engineer and Land Surveying Services); or (7) Section 16315 (Purchase of Drugs by Generic Names). §16309. Competitive Sealed Bidding. (a) Application. The provisions of this section apply to every procurement made by competitive sealed bidding, including multi-step bidding.§16309. Competitive Sealed Bidding. (a) Application. The provisions of this section apply to every procurement made by competitive sealed bidding, including multi-step bidding.§16311. Small Purchases. (1) Application. In accordance with 5 GCA §5213 (Small Purchases) of the GuamProcurement Act, this section is established for procurement of less than five thousand dollars ($5,000) for supplies or services and less than fifteen thousand dollars ($15,000) for construction.(b) Authority to Make Small Purchases. (1) Amount. The Hospital Administrator may use this section if the procurement is to be less than five thousand dollars ($5,000) for supplies or services and less than fifteen thousand dollars ($15,000) for construction. If these methods are not used, the other methods of source selection provided in 5 GCA §5210 (Methods of Source Selection) of the Guam Procurement Act and these Regulations shall apply. Condition: For 2 (or 17%) of 12 items tested, GMHA’s method of procurement did not comply with local procurement regulations. GMHA is considered an instrumentality of the Government of Guam which is included in the definition of a State within 2 CFR 200. Accordingly, as there exists policies and procedures for procurement, such policies and procedures should have been used in conducting procurement transactions under a federal award in accordance with 2 CFR 200.317. Cause: GMHA did not use the same policies and procedures used for procurement of non-federal funds in accordance with 2 CFR 200.317. Effect: GMHA is in noncompliance with the applicable requirement. Recommendation: GMHA should adopt and implement the same policies and procedures for federal funds as those used for non-federal funds in accordance with 2 CFR 200.317. Views of Responsible Officials: Management disagrees with the finding. Management concluded that procurement thresholds is not an aspect of policies and procedures required under 2 CFR 200.317. Management concluded that higher thresholds set in 2 CFR 200.320 Simplified Acquisition Threshold as the applicable requirement. Please refer to GMHA’s views of responsible officials for their detailed response.

Finding 2024-001 Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Procurement standards contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance) , Subpart D ‐ Post Federal Award Requirements, Section 200.320 through 200.321 require that procurements of goods and services charges to Federal awards be conducted to provide full and open competition including the meeting of criteria for the use of the noncompetitive procurement method. Condition/Context During our testing of 1 of 2 material procurement transactions, we identified the Organization lacked written justification for the use of the noncompetitive procurement method as required by 2 CFR Part 200.320(c). Section II - Federal Award Findings and Questioned Costs (Continued) Finding 2024-001 Cause The Organization's internal controls over procurement were not sufficient to ensure that appropriate justification be determined and documented when the noncompetitive procurement method is used. Effect The Organization did not comply the procurement standards set out at 2 CFR Part 200 as it related to the selected procurement transaction. Questioned Costs None Repeat Finding No. Recommendation Subsequent to June 30, 2024, we noted the Organization requested and received explicit approval from the United States Department of State to use the noncompetitive procurement method for the procurement transaction tested. We recommend the Organization implement measures to ensure that proper justification be determined and documented when utilizing the noncompetitive procurement method. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.

Finding 2024-001 Material weakness in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Federal Agency: United States Department of State Program Titles: Office of Global Women’s Issues Assistance Listing Number: 19.801 Pass-Through Entity: N/A Award Numbers: SLMAQM21CA3275 Award Periods: September 30, 2021 through September 30, 2025 Criteria Procurement standards contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (the Uniform Guidance) , Subpart D ‐ Post Federal Award Requirements, Section 200.320 through 200.321 require that procurements of goods and services charges to Federal awards be conducted to provide full and open competition including the meeting of criteria for the use of the noncompetitive procurement method. Condition/Context During our testing of 1 of 2 material procurement transactions, we identified the Organization lacked written justification for the use of the noncompetitive procurement method as required by 2 CFR Part 200.320(c). Section II - Federal Award Findings and Questioned Costs (Continued) Finding 2024-001 Cause The Organization's internal controls over procurement were not sufficient to ensure that appropriate justification be determined and documented when the noncompetitive procurement method is used. Effect The Organization did not comply the procurement standards set out at 2 CFR Part 200 as it related to the selected procurement transaction. Questioned Costs None Repeat Finding No. Recommendation Subsequent to June 30, 2024, we noted the Organization requested and received explicit approval from the United States Department of State to use the noncompetitive procurement method for the procurement transaction tested. We recommend the Organization implement measures to ensure that proper justification be determined and documented when utilizing the noncompetitive procurement method. Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.

Program: Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Program Requirement: Procurement Criteria: Per 2 CFR §200.321 (a), The non-Federal entity must take all necessary affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible. Condition: The College’s procurement files did not document that affirmative steps had been taken in the procurement files. Context: Two out of two purchases did not have documentation about affirmative steps taken in the procurement file. Cause: The College has not updated their procurement manual to include verbiage about contracting with small and minority businesses, women’s business enterprises and labor surplus firms. Effect: There are grant documents which address contracting with small and minority businesses while the procurement manual does not reflect this. Questioned Costs: No Repeat Finding: No Recommendation: The College needs to update the procurement manual to include verbiage about contracting with small and minority business, women’s business enterprises and labor surplus firms. Views of Responsible Officials: The College agrees with the recommendation to update the procurement manual to address 2 CFR §200.321 (a).

Program: Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Program Requirement: Procurement Criteria: Per 2 CFR §200.321 (a), The non-Federal entity must take all necessary affirmative steps to assure that minority businesses, women's business enterprises, and labor surplus area firms are used when possible. Condition: The College’s procurement files did not document that affirmative steps had been taken in the procurement files. Context: Two out of two purchases did not have documentation about affirmative steps taken in the procurement file. Cause: The College has not updated their procurement manual to include verbiage about contracting with small and minority businesses, women’s business enterprises and labor surplus firms. Effect: There are grant documents which address contracting with small and minority businesses while the procurement manual does not reflect this. Questioned Costs: No Repeat Finding: No Recommendation: The College needs to update the procurement manual to include verbiage about contracting with small and minority business, women’s business enterprises and labor surplus firms. Views of Responsible Officials: The College agrees with the recommendation to update the procurement manual to address 2 CFR §200.321 (a).

Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A210087 and H173A180086 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: Unknown Award Period: Fiscal Year 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that, for one contract, the District did not utilize quotes, sealed bids, or competitive proposals for the noted procurement, and any sole course conclusions were also not documented. Questioned Costs: ALN 84.027 and 84.173, Federal Award Identification Number H027A220087 and H173A180086: $4,502 Context: Of the two procurements tested in the Special Education Cluster, one was missing documentation to support a proper procurement method. Cause: The District procedures do not contain sufficient guidelines for ensuring all procurements utilize the proper method and are properly documented. Effect: The lack of proper methods and documentation could lead to using vendors for small purchase acquisitions without ensuring comparable pricing from other vendors and justifying costs. Repeat Finding: Yes – 2022-002. Recommendation: CLA recommends the District puts in place the proper procedures for sufficiently documenting all procurements and methodology used. View of Responsible Official: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A210087 and H173A180086 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: Unknown Award Period: Fiscal Year 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that, for one contract, the District did not utilize quotes, sealed bids, or competitive proposals for the noted procurement, and any sole course conclusions were also not documented. Questioned Costs: ALN 84.027 and 84.173, Federal Award Identification Number H027A220087 and H173A180086: $4,502 Context: Of the two procurements tested in the Special Education Cluster, one was missing documentation to support a proper procurement method. Cause: The District procedures do not contain sufficient guidelines for ensuring all procurements utilize the proper method and are properly documented. Effect: The lack of proper methods and documentation could lead to using vendors for small purchase acquisitions without ensuring comparable pricing from other vendors and justifying costs. Repeat Finding: Yes – 2022-002. Recommendation: CLA recommends the District puts in place the proper procedures for sufficiently documenting all procurements and methodology used. View of Responsible Official: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A210087 and H173A180086 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: Unknown Award Period: Fiscal Year 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that, for one contract, the District did not utilize quotes, sealed bids, or competitive proposals for the noted procurement, and any sole course conclusions were also not documented. Questioned Costs: ALN 84.027 and 84.173, Federal Award Identification Number H027A220087 and H173A180086: $4,502 Context: Of the two procurements tested in the Special Education Cluster, one was missing documentation to support a proper procurement method. Cause: The District procedures do not contain sufficient guidelines for ensuring all procurements utilize the proper method and are properly documented. Effect: The lack of proper methods and documentation could lead to using vendors for small purchase acquisitions without ensuring comparable pricing from other vendors and justifying costs. Repeat Finding: Yes – 2022-002. Recommendation: CLA recommends the District puts in place the proper procedures for sufficiently documenting all procurements and methodology used. View of Responsible Official: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A210087 and H173A180086 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: Unknown Award Period: Fiscal Year 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that, for one contract, the District did not utilize quotes, sealed bids, or competitive proposals for the noted procurement, and any sole course conclusions were also not documented. Questioned Costs: ALN 84.027 and 84.173, Federal Award Identification Number H027A220087 and H173A180086: $4,502 Context: Of the two procurements tested in the Special Education Cluster, one was missing documentation to support a proper procurement method. Cause: The District procedures do not contain sufficient guidelines for ensuring all procurements utilize the proper method and are properly documented. Effect: The lack of proper methods and documentation could lead to using vendors for small purchase acquisitions without ensuring comparable pricing from other vendors and justifying costs. Repeat Finding: Yes – 2022-002. Recommendation: CLA recommends the District puts in place the proper procedures for sufficiently documenting all procurements and methodology used. View of Responsible Official: There is no disagreement with the audit finding.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

CONDITION: The Northern Cambria School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Northern Cambria School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The Northern Cambria School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Northern Cambria School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The Northern Cambria School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Northern Cambria School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The Northern Cambria School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Northern Cambria School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The Northern Cambria School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Northern Cambria School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The Northern Cambria School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Northern Cambria School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The Sto-Rox School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. EFFECT: The Sto-Rox School District did not comply with the requirements of Section 2 CFR 200.321(a) of the Uniform Guidance regarding required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The Sto-Rox School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. EFFECT: The Sto-Rox School District did not comply with the requirements of Section 2 CFR 200.321(a) of the Uniform Guidance regarding required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The Sto-Rox School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. EFFECT: The Sto-Rox School District did not comply with the requirements of Section 2 CFR 200.321(a) of the Uniform Guidance regarding required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The Sto-Rox School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. EFFECT: The Sto-Rox School District did not comply with the requirements of Section 2 CFR 200.321(a) of the Uniform Guidance regarding required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The Sto-Rox School District does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. EFFECT: The Sto-Rox School District did not comply with the requirements of Section 2 CFR 200.321(a) of the Uniform Guidance regarding required affirmative action steps to be employed in the procurement process. QUESTIONED COST: None CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: In connection with the Cambria Heights School District’s RTU Replacement Project, the District did not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms were used, when possible, in the procurement process. This is a repeat finding (2022-008) from the previous fiscal year. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Cambria Heights School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: Hranec Sheet Metal, Inc. - $1,058,759, Westmoreland Electric Services – $92,163. RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.

CONDITION: In connection with the Cambria Heights School District’s RTU Replacement Project, the District did not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms were used, when possible, in the procurement process. This is a repeat finding (2022-008) from the previous fiscal year. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Cambria Heights School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: Hranec Sheet Metal, Inc. - $1,058,759, Westmoreland Electric Services – $92,163. RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.

CONDITION: In connection with the Cambria Heights School District’s RTU Replacement Project, the District did not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms were used, when possible, in the procurement process. This is a repeat finding (2022-008) from the previous fiscal year. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Cambria Heights School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: Hranec Sheet Metal, Inc. - $1,058,759, Westmoreland Electric Services – $92,163. RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.

CONDITION: In connection with the Cambria Heights School District’s RTU Replacement Project, the District did not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms were used, when possible, in the procurement process. This is a repeat finding (2022-008) from the previous fiscal year. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Cambria Heights School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: Hranec Sheet Metal, Inc. - $1,058,759, Westmoreland Electric Services – $92,163. RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.

CONDITION: In connection with the Cambria Heights School District’s RTU Replacement Project, the District did not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms were used, when possible, in the procurement process. This is a repeat finding (2022-008) from the previous fiscal year. CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. Section 2 CFR 200.321(a) of the Uniform Guidance outlines the six (6) affirmative steps to follow. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The Cambria Heights School District did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process. QUESTIONED COST: Hranec Sheet Metal, Inc. - $1,058,759, Westmoreland Electric Services – $92,163. RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) affirmative action steps as stated Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.

Assistance Listings number and name: 14.267 Continuum of Care Program Award number and year: AZ9999U9T002101, February 1, 2022 through June 30, 2023 Federal agency: U.S. Department of Housing and Urban Development Compliance requirement: Procurement Questioned costs: Unknown Condition—Contrary to federal regulations, the Department’s policies and procedures did not include provisions required by the federal regulations, and the Department did not retain documentation to support procurement actions for 2 vendors we tested. Specifically, the Department’s policies and procedures did not require procurement transactions to be documented or conducted in a manner providing full and open competition. Further, the Department did not include items required by federal regulations such as contracting with small and minority businesses, women’s business enterprises, veteran-owned businesses, and labor surplus area firms; domestic preferences for procurements; procurement of recovered materials; and required federal contract provisions. Further, the Department paid the 2 vendors we tested $257,165 for administrative support services during fiscal year 2023 without retaining procurement action documentation such as requests for proposals, contracts, or other documents demonstrating the Department’s compliance with federal procurement requirements. Effect—The Department’s policies and procedures not complying with federal regulations and not maintaining documentation of its procurement actions increased the Department’s risk of not: • Receiving the most advantageous prices for the goods and services purchased with federal monies. • Considering eligible small and minority businesses, women's business enterprises, veteran-owned businesses, and labor surplus area firms as potential vendors. • Giving preference to procure goods, products, and materials produced in the United States. • Considering purchasing products or services that can be reused, refurbished, or recycled. Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—The Department did not establish and maintain effective internal control over the program’s procurement requirements that provided reasonable assurance that it was managing the program’s awards in compliance with federal regulations. Department management reported that because the Department does not have to comply with State procurement requirements, they did not think about and consider federal regulations when developing written procurement policies and procedures and procuring program services for federal awards.1 Further, Department management reported they have no record of when the Department awarded the administrative service contracts because the contracts are at least 15 years old, and the records are either not accessible in storage or were destroyed. Criteria—Federal regulations require the Department to follow the same policies and procedures it uses for nonfederal procurements and to retain all records related to a federal program, including procurement action documentation, for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency or pass-through grantor (2 CFR §§ 200.317 and 200.334). Federal regulations also require the Department to comply with procurement standards for contracting with small and minority businesses, women’s business enterprises, veteran-owned businesses, and labor surplus area firms; domestic preferences for procurements; and procurement of recovered materials; and ensure that every purchase order or contract includes required federal contract provisions (2 CFR §§200.321, 200.322, 200.323, and 200.327). Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Department should: 1. Establish and maintain effective internal control over the program’s procurement requirements by updating its written policies and procedures to: a. Retain procurement action documentation for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency. b. Require full and open competition using requests for competitively bid proposals. Alternatively, document each sole source procurement only after conducting a good-faith search for available sources and concluding there is only a single source and include it in the contract file. c. Document compliance with procurement standards for contracting with small and minority businesses, women’s business enterprises, veteran-owned businesses, and labor surplus area firms; domestic preferences for procurements; and procurement of recovered materials. d. Ensure that every purchase order or contract includes required federal contract provisions. 2. Retain procurement action documentation when procuring property and services using federal funds in accordance with federal records retention requirements, ensuring compliance with federal procurement requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department is exempt from following the State’s procurement code (Arizona Revised Statutes §41-3953[D]).

Assistance Listings number and name: 14.267 Continuum of Care Program Award number and year: AZ9999U9T002101, February 1, 2022 through June 30, 2023 Federal agency: U.S. Department of Housing and Urban Development Compliance requirement: Procurement Questioned costs: Unknown Condition—Contrary to federal regulations, the Department’s policies and procedures did not include provisions required by the federal regulations, and the Department did not retain documentation to support procurement actions for 2 vendors we tested. Specifically, the Department’s policies and procedures did not require procurement transactions to be documented or conducted in a manner providing full and open competition. Further, the Department did not include items required by federal regulations such as contracting with small and minority businesses, women’s business enterprises, veteran-owned businesses, and labor surplus area firms; domestic preferences for procurements; procurement of recovered materials; and required federal contract provisions. Further, the Department paid the 2 vendors we tested $257,165 for administrative support services during fiscal year 2023 without retaining procurement action documentation such as requests for proposals, contracts, or other documents demonstrating the Department’s compliance with federal procurement requirements. Effect—The Department’s policies and procedures not complying with federal regulations and not maintaining documentation of its procurement actions increased the Department’s risk of not: • Receiving the most advantageous prices for the goods and services purchased with federal monies. • Considering eligible small and minority businesses, women's business enterprises, veteran-owned businesses, and labor surplus area firms as potential vendors. • Giving preference to procure goods, products, and materials produced in the United States. • Considering purchasing products or services that can be reused, refurbished, or recycled. Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—The Department did not establish and maintain effective internal control over the program’s procurement requirements that provided reasonable assurance that it was managing the program’s awards in compliance with federal regulations. Department management reported that because the Department does not have to comply with State procurement requirements, they did not think about and consider federal regulations when developing written procurement policies and procedures and procuring program services for federal awards.1 Further, Department management reported they have no record of when the Department awarded the administrative service contracts because the contracts are at least 15 years old, and the records are either not accessible in storage or were destroyed. Criteria—Federal regulations require the Department to follow the same policies and procedures it uses for nonfederal procurements and to retain all records related to a federal program, including procurement action documentation, for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency or pass-through grantor (2 CFR §§ 200.317 and 200.334). Federal regulations also require the Department to comply with procurement standards for contracting with small and minority businesses, women’s business enterprises, veteran-owned businesses, and labor surplus area firms; domestic preferences for procurements; and procurement of recovered materials; and ensure that every purchase order or contract includes required federal contract provisions (2 CFR §§200.321, 200.322, 200.323, and 200.327). Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Department should: 1. Establish and maintain effective internal control over the program’s procurement requirements by updating its written policies and procedures to: a. Retain procurement action documentation for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency. b. Require full and open competition using requests for competitively bid proposals. Alternatively, document each sole source procurement only after conducting a good-faith search for available sources and concluding there is only a single source and include it in the contract file. c. Document compliance with procurement standards for contracting with small and minority businesses, women’s business enterprises, veteran-owned businesses, and labor surplus area firms; domestic preferences for procurements; and procurement of recovered materials. d. Ensure that every purchase order or contract includes required federal contract provisions. 2. Retain procurement action documentation when procuring property and services using federal funds in accordance with federal records retention requirements, ensuring compliance with federal procurement requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department is exempt from following the State’s procurement code (Arizona Revised Statutes §41-3953[D]).

CONDITION: The School District of the City of Monessen does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. This is a repeat finding from the 2021-2022 fiscal year – Finding 2022-002 CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. The Uniform Guidance specifies six (6) affirmative action steps that must be taken. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The School District of the City of Monessen did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process.QUESTIONED COST: None RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) recommended affirmative action steps as stated in Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The School District of the City of Monessen does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. This is a repeat finding from the 2021-2022 fiscal year – Finding 2022-002 CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. The Uniform Guidance specifies six (6) affirmative action steps that must be taken. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The School District of the City of Monessen did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process.QUESTIONED COST: None RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) recommended affirmative action steps as stated in Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The School District of the City of Monessen does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. This is a repeat finding from the 2021-2022 fiscal year – Finding 2022-002 CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. The Uniform Guidance specifies six (6) affirmative action steps that must be taken. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The School District of the City of Monessen did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process.QUESTIONED COST: None RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) recommended affirmative action steps as stated in Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

CONDITION: The School District of the City of Monessen does not take affirmative action steps to ensure that minority businesses, women’s business enterprises, and labor surplus area firms are used, when possible, in the procurement process. This is a repeat finding from the 2021-2022 fiscal year – Finding 2022-002 CRITERIA: In accordance with Section 2 CFR 200.321(a) of the Uniform Guidance, the District must take all necessary affirmative action steps to assure that minority businesses, women’s business enterprises, and labor surplus area firms are used when possible. The Uniform Guidance specifies six (6) affirmative action steps that must be taken. CAUSE: School District personnel stated that these businesses are considered but recognized that no affirmative action steps are currently employed to solicit these businesses. EFFECT: The School District of the City of Monessen did not comply with the requirements of 2 CFR 200.321(a) of the Uniform Guidance with regard to required affirmative action steps to be employed in the procurement process.QUESTIONED COST: None RECOMMENDATION: I am recommending that the management of the School District implement, as a matter of policy, the six (6) recommended affirmative action steps as stated in Section 2 CFR 200.321(a) of the Uniform Guidance. VIEWS OF RESPONSIBLE OFFICIALS: Management of the School District has reviewed the above noted finding and recommendation and have developed a corresponding ‘Corrective Action Plan’ to address this matter (See Corrective Action Plan).

Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A210087 and H173A180086 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: Unknown Award Period: Fiscal Year 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that, for one contract, the District did not utilize quotes, sealed bids, or competitive proposals for the noted procurement, and any sole course conclusions were also not documented. Questioned Costs: ALN 84.027 and 84.173, Federal Award Identification Number H027A220087 and H173A180086: $4,502 Context: Of the two procurements tested in the Special Education Cluster, one was missing documentation to support a proper procurement method. Cause: The District procedures do not contain sufficient guidelines for ensuring all procurements utilize the proper method and are properly documented. Effect: The lack of proper methods and documentation could lead to using vendors for small purchase acquisitions without ensuring comparable pricing from other vendors and justifying costs. Repeat Finding: Yes – 2022-002. Recommendation: CLA recommends the District puts in place the proper procedures for sufficiently documenting all procurements and methodology used. View of Responsible Official: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A210087 and H173A180086 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: Unknown Award Period: Fiscal Year 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that, for one contract, the District did not utilize quotes, sealed bids, or competitive proposals for the noted procurement, and any sole course conclusions were also not documented. Questioned Costs: ALN 84.027 and 84.173, Federal Award Identification Number H027A220087 and H173A180086: $4,502 Context: Of the two procurements tested in the Special Education Cluster, one was missing documentation to support a proper procurement method. Cause: The District procedures do not contain sufficient guidelines for ensuring all procurements utilize the proper method and are properly documented. Effect: The lack of proper methods and documentation could lead to using vendors for small purchase acquisitions without ensuring comparable pricing from other vendors and justifying costs. Repeat Finding: Yes – 2022-002. Recommendation: CLA recommends the District puts in place the proper procedures for sufficiently documenting all procurements and methodology used. View of Responsible Official: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A210087 and H173A180086 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: Unknown Award Period: Fiscal Year 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that, for one contract, the District did not utilize quotes, sealed bids, or competitive proposals for the noted procurement, and any sole course conclusions were also not documented. Questioned Costs: ALN 84.027 and 84.173, Federal Award Identification Number H027A220087 and H173A180086: $4,502 Context: Of the two procurements tested in the Special Education Cluster, one was missing documentation to support a proper procurement method. Cause: The District procedures do not contain sufficient guidelines for ensuring all procurements utilize the proper method and are properly documented. Effect: The lack of proper methods and documentation could lead to using vendors for small purchase acquisitions without ensuring comparable pricing from other vendors and justifying costs. Repeat Finding: Yes – 2022-002. Recommendation: CLA recommends the District puts in place the proper procedures for sufficiently documenting all procurements and methodology used. View of Responsible Official: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A210087 and H173A180086 Pass-Through Agency: Minnesota Department of Education Pass-Through Numbers: Unknown Award Period: Fiscal Year 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: The District should have controls in place to ensure compliance per the requirements of 2 CFR §200.303. 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that, for one contract, the District did not utilize quotes, sealed bids, or competitive proposals for the noted procurement, and any sole course conclusions were also not documented. Questioned Costs: ALN 84.027 and 84.173, Federal Award Identification Number H027A220087 and H173A180086: $4,502 Context: Of the two procurements tested in the Special Education Cluster, one was missing documentation to support a proper procurement method. Cause: The District procedures do not contain sufficient guidelines for ensuring all procurements utilize the proper method and are properly documented. Effect: The lack of proper methods and documentation could lead to using vendors for small purchase acquisitions without ensuring comparable pricing from other vendors and justifying costs. Repeat Finding: Yes – 2022-002. Recommendation: CLA recommends the District puts in place the proper procedures for sufficiently documenting all procurements and methodology used. View of Responsible Official: There is no disagreement with the audit finding.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.

FINDING: 2023-003 – Procurement Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster & Special Education Cluster CFDA Numbers: 10.555 & 84.027 and 84.173 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0276-000-000, H027A220087, H027X210087, H173A220086, and H173X210086 Award Periods: Fiscal year ended June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: 2 CFR §200.318 - §200.321 requires that all procurement transactions be conducted in a manner providing full and open competition consistent with the standards of the section. Procurement by noncompetitive proposals may be utilized if the item is available only from a single source, however efforts must be made and the process fully documented in order to conclude that the use of a sole source procurement is appropriate. Condition: It was noted during procurement testing that the district did not document its process for concluding that procurements met the requirements of being a sole source situation. Questioned Costs: ALN 10.555 - $19,122.61 and ALN 84.027 and 84.173 - $68,100. Context: Of the 13 procurement transactions tested, 2 of them were considered sole source by the District but did not have the proper documentation to support the process used to determine that. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes. 2022-001. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of Responsible Official: There is no disagreement with the audit finding. The District will implement procedures to document its rationale for the procurement method used.