Finding 2025-001: Special Tests – Wage Rate Requirements – Significant Deficiency Program: Highway Planning and Construction Assistance Listing No.: 20.205 Federal Agency: U.S. Department of Transportation Pass-through entity: Texas Department of Transportation Award No.: CSJ0918-24-268 Award Year: Fiscal year 2024-2025 Category of Finding: Special Tests – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3147). Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: In two out of seven selections tested for required certified payrolls for contractor or subcontractor work performed during the fiscal year ended September 30, 2025, the certified payrolls were not obtained by the City until subsequent to audit fieldwork. In addition, the City did not have internal controls in place to identify that these certified payrolls were not being obtained. Cause: Policies and procedures were not in place to ensure that certified payrolls are obtained from contractors during the year. Effect: Certified payrolls were not obtained or reviewed in a timely manner for the project so laborers and mechanics employed by contractors or subcontractors may not have been paid prevailing wage rates. Questioned Costs: None. Context: There were two contracts included for projects under this program. Certified payrolls were not obtained from one of the contractors until subsequent to audit fieldwork. Identification of a repeat finding: Not a repeat finding. Recommendation: The City should design and implement internal controls to ensure compliance with the program’s wage rates requirements. These controls should include monitoring construction contracts, tracking weekly certified payrolls or notification of no work performed and reviewing to ensure that the payrolls are properly certified for all contractor and subcontractor work performed. Management Response: See Corrective Action Plan.
Finding 2025-001: Special Tests – Wage Rate Requirements – Significant Deficiency Program: Highway Planning and Construction Assistance Listing No.: 20.205 Federal Agency: U.S. Department of Transportation Pass-through entity: Texas Department of Transportation Award No.: CSJ0918-24-268 Award Year: Fiscal year 2024-2025 Category of Finding: Special Tests – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3147). Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: In two out of seven selections tested for required certified payrolls for contractor or subcontractor work performed during the fiscal year ended September 30, 2025, the certified payrolls were not obtained by the City until subsequent to audit fieldwork. In addition, the City did not have internal controls in place to identify that these certified payrolls were not being obtained. Cause: Policies and procedures were not in place to ensure that certified payrolls are obtained from contractors during the year. Effect: Certified payrolls were not obtained or reviewed in a timely manner for the project so laborers and mechanics employed by contractors or subcontractors may not have been paid prevailing wage rates. Questioned Costs: None. Context: There were two contracts included for projects under this program. Certified payrolls were not obtained from one of the contractors until subsequent to audit fieldwork. Identification of a repeat finding: Not a repeat finding. Recommendation: The City should design and implement internal controls to ensure compliance with the program’s wage rates requirements. These controls should include monitoring construction contracts, tracking weekly certified payrolls or notification of no work performed and reviewing to ensure that the payrolls are properly certified for all contractor and subcontractor work performed. Management Response: See Corrective Action Plan.
Federal Grantor: Department of Agriculture, Pass-Through: Nebraska Department of Education Program: Child Nutrition Cluster, Special Education Cluster Award No. and Year: 13898414/13897314/47600262900 and 2024, 24-6406-00-19-028-0001/24-6408-00-19-028-0001/24-6411-00-19-028-0001/24-6412-00-19-028-0001/24-6418-132-28-0001P and 2024 Federal Assistance Listing Number: 10.553/10.555/10.559/10.582, 84.027/84.173 Compliance Requirement: Procurement, Suspension, and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition: In our testing of procurement, suspension, and debarment it was identified that the District’s procurement policy does not address the following items: Avoid acquisition of duplicative items (2 CFR 200.318) Disadvantaged Business Enterprise Program (2 CFR 200.321) Domestic preferences (2 CFR 200.322) Recovered materials, if subject to EPA requirements (2 CFR 200.323) Contract price/types (2 CFR 200.326) Cause: Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with these requirements. Effect: A lack of compliant policies increases the overall risk of non-compliance. Questioned Costs: None reported Context/Sampling: Overall procurement policy. Repeat Finding from Prior Year(s): No Recommendation: We recommend that management adopt a revised procurement policy addressing the avoidance of acquisition of duplicative items, Disadvantaged Business Enterprise Program, domestic preferences, recovered materials if subject to EPA requirements, and contract price/types. Views of Responsible Officials - There is no disagreement with the audit finding.
Procurement Federal Agency: United States Department of Education Federal Program Name: Special Education Cluster (IDEA) Assistance Listing Number: 84.027 / 84.173 Federal Award Identification Number and Year: HO27A230021 - 2023 (84.027) HO27A240021 - 2024 (84.027) H173A240024 - 2024 (84.173) H173A230024 - 2023 (84.173) Pass-Through Agency: Connecticut State Department of Education Pass-Through Number(s): 12060-SDE64370-20977-2024 12060-SDE64370-20983-2024 12060-SDE64370-20977-2025 12060-SDE64370-20983-2025 Award Period: 7/1/2023-6/30/2025 (2024 Grant) 7/1/2024-6/30/2026 (2025 Grant) Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: The Board of Education must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: The Board of Education failed to solicit written quotations (in noncompliance with federal UG for procurements over $10,000) related to a contract paid under the grant. Under local policy, sealed bids should have been obtained for a competitive procurement over $25,000. Questioned costs: None noted. Context: The Board of Education is required to solicit competitive quotations for contracts over $10,000 paid with federal grant funds or document a non-competitive procurement justification. Cause: The contract was renewed without conducting any procurement procedures or maintaining documentation supporting a non-competitive procurement justification. Effect: Noncompliance with local procurement policy and federal procurement guidelines. Repeat Finding: No Recommendation: We recommend that the Board of Education review its procurement processes to ensure they comply with local policies and federal guidance. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding. The Board of Education will review its procurement processes to ensure they comply with local policies and federal guidance.
2025-004 PROCUREMENT United States Department of Agriculture Passed through Louisiana Department of Agriculture and Forestry Child Nutrition Cluster (Federal Assistance No. 10.555) Passed through Louisiana Department of Education Child Nutrition Cluster (Federal Assistance Nos. 10.553, 10.555, 10.559, and 10.582) Criteria: Non-federal entities must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 and use their own documented procurement procedures, which reflect applicable State and local laws and regulations provided that the procurements conform to applicable Federal statutes and the procurement requirements identified in 2 CFR part 200. Internal controls should be designed to ensure compliance with these federal requirements. Condition: The School Board’s current procurement process for School Food Service contracts does not include an independent review of the bid analysis prepared after the public opening of sealed bids. The bid analysis, which summarizes and evaluates the bids received, is prepared solely by a School Food Service employee and is not reviewed or approved by any other individual or department prior to being utilized by the School Board to award the contract. Although no input errors were noted through testing procedures, the School Board relied on unverified information when making award decisions intended to comply with procurement regulations. A total of 12 contracts were tested, of which 6 required bid tabulation analysis summaries to be prepared. Through testing performed, it was noted there did not appear to be a review of the bid tabulation analysis summary inputs prior to approval by the board in each of the 6 instances. Cause: Proper procedures were not implemented to ensure compliance with all procurement regulations and the established procedures were not properly executed by Child Nutrition personnel. Questioned Costs: Not applicable as no input errors were identified on the bid analysis tabulation summaries tested. Effect: While procurement purchases were ultimately determined to be in compliance with Federal procurement standards, the opportunity existed for non-compliance with Federal regulations. Recommendation: The School Board should remind Child Nutrition personnel of established procedures and establish additional internal controls to ensure that all inputs are entered into the bid analysis summary are complete and accurate. View of Responsible Official: Management agrees with the finding and will take corrective action. See corrective action plan submitted by management.
Criteria: Under Uniform Guidance (2 CFR §200.302, §200.303, §200.305, §200.318–§200.326, and §200.430), a non-federal entity must establish, document, and maintain written policies and procedures for the management of federal awards. Effective internal control over federal awards provides reasonable assurance that the entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the awards. Condition: The Town did not have written policies and procedures required by Uniform Guidance (2 CFR 200) for the administration of its federal programs. Specifically, the Town has not formally documented policies and procedures addressing key areas required under the Uniform Guidance, including but not limited to allowable and unallowable costs and cost principles, procurement standards, suspension and debarment, conflicts of interest, cash management, and reporting and record retention requirements. While informal processes exist, they are not sufficiently documented to ensure consistent application or compliance with federal requirements. Cause: The Town has not developed or formally adopted written federal grant management policies and procedures. Effect: Without formal written policies and procedures, there is an increased risk of noncompliance with federal program requirements. This condition exposes the Town to potential noncompliance with federal regulations, increases the risk of unallowable costs being charged to federal awards, and may affect the Town’s ability to properly administer, monitor, and report federal program activity. Additionally, the lack of documentation may impair continuity of compliance in the event of change in key personnel. Recommendation: The Town should develop, formally adopt, and implement written policies and procedures to comply with Uniform Guidance (2 CFR 200). The policies should address all major compliance areas, including but not limited to allowable and unallowable costs and cost principles, procurement standards, suspension and debarment, conflicts of interest, cash management, and reporting and record retention requirements. The Town should ensure that staff responsible for federal grant administration are properly trained to ensure adherence to these policies and that the policies are reviewed periodically and updated as needed. Views of responsible officials: See management’s responses to findings on Page 78.
Federal agency: U.S. Department of Agriculture Federal program name: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559 Federal Award Identification Number and Year: 202121N109942, 2025 Pass-Through Agency: Minnesota Department of Agriculture Pass-Through Number: 202121N109942 Award Period: Year ended June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Non-federal entities other than states must follow the procurement standards set out at CFR sections 200.318 through 200.326. This includes utilizing one of the five allowable procurement methods, including small purchase guidelines for items over the micro-purchase threshold and sealed bids, competitive proposals, or noncompetitive proposals when items exceed the simplified acquisition threshold. In addition, the Uniform Guidance requires that the entity maintain records sufficient to detail the history of the procurement. 2 CFR 200.303 requires that the entity have sufficient controls over compliance related to federal awards. Condition: During our testing of the District’s procurements within the Child Nutrition program, it was noted that not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Questioned Costs: ALN 10.553 and 10.555 - $220,560.64 Context: Out of thirteen procurement which were tested, we noted one of them for which the District did not retain documentation detailing the history of the procurement, including the rationale for choosing the particular vendor. This was a statistically valid sample. Cause: Controls were insufficient to ensure this process occurred. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: No 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 officials: There is no disagreement with the audit finding.
Federal program information: Funding agency: U.S. Department of Treasury ALN Title: Coronavirus State and Local Fiscal Recovery Funds ALN number: 21.027 Award period and number: 7/23/2021 – 12/31/2024; SLFRP4454 Criteria or Specific Requirement: Uniform Guidance, 2 CFR Section 200.318(a) requires the City to have documented procurement procedures. The recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327. Uniform Guidance, 2 CFR Section 200.318(c)(1), requires non-federal entities to maintain written standards of conduct covering conflicts of interest for employees engaged in the selection, award, and administration of contracts. 2 CFR 200.321 requires affirmative steps to assure that minority businesses, women’s business enterprises, veteran-owned businesses, and labor surplus area firms are included in procurement opportunities. 2 CFR 200.318(i) requires recipients or subrecipients to maintain records sufficient to detail the history of each procurement, including rationale for selection, method, and price. Condition: Based on review of the City’s procurement policy (Public Contracting Rules), we noted that the policy does not incorporate all procurement requirements established in 2 CFR sections 200.317 through 200.326, as required by the Uniform Guidance for recipients of federal awards. Specifically, we observed the following areas of noncompliance or omissions: . The policy does not contain all written standards of conduct related to conflicts of interest as required by 2 CFR 200.318(c)(1); . The policy does not explicitly include requirements for taking affirmative steps to ensure that small, minority, women-owned, veteran-owned, and labor surplus area firms are solicited and considered in procurement opportunities, as required by 2 CFR 200.321(b); . The policy lacks explicit provisions to ensure that sufficient procurement records are maintained to detail the history of procurement transactions, as required by 2 CFR 200.318(i). Due to this, there is an increased risk that procurements funded by federal awards may not be conducted in full compliance with Uniform Guidance. Cause and Effect: The City’s procurement policy has not been fully updated to reflect all applicable procurement requirements of the Uniform Guidance. Procurements conducted under federal awards are at increased risk of noncompliance with Uniform Guidance requirements, which could result in findings, questioned costs, or potential repayment of federal funds. Furthermore, there is an increased risk that opportunities for small, minority, and women-owned businesses are not equitably considered and that procurement records may not be sufficient for federal review. Questioned Costs: None. Recommendation: We recommend that the City update its procurement policy and procedures to address the missing requirements under 2 CFR 200.317 through 200.326, specifically ensuring coverage of standards of conduct for conflicts of interest, affirmative steps for inclusion of targeted businesses, and comprehensive procurement recordkeeping. The City should ensure staff are trained on these updated requirements and monitor compliance for all federally funded procurements. Views of Responsible Officials: The City agrees with the findings as specified above. The procurement policy will be updated to reflect these changes.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2025‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559, 10.582 Federal Agency: U.S. Department of Agriculture Federal Award Number: 6AZ300400, 7AZ300AZ3, 7AZ310AZ1 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Procurement, Suspension and Debarment Criteria Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. Subrecipients must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition The District did not follow Federal, State, and Board policies and regulations governing procurement. Cause The District’s review procedures over each transaction did not operate as designed. Effect The District was not in compliance with Federal, State, and Board policies and regulations governing procurement. Context The District issued requests for written quotes to multiple vendors, and awarded the quote to three vendors to avoid spending over $100,000 with one vendor. However, as the items purchased were homogenous items, and the expenses with the three vendors totaled $252,424, the District should have issued a sealed procurement. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Approvers should ensure requisitions exceeding the formal procurement threshold are appropriately procured in accordance with Federal, State and Board policies and regulations. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2025‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559, 10.582 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 7AZ300AZ3, 6AZ300400, 7AZ310AZ1 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Procurement and Suspension and Debarment Criteria Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §200.318 through 200.326. Subrecipients must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200.A Condition The District did not follow Federal, State, and Board policies and regulations governing procurement. Cause The District’s review procedures over each transaction did not operate as designed. Effect The District was not in compliance with Federal, State, and Board policies and regulations governing procurement. Context The District procured supplies from a vendor that totaled $50,663. However, the District could not provide documentation showing that the District procured the supplies in accordance with Federal, State, and Board policies and regulations; specifically, that price or rate quotations were obtained from an adequate number of qualified sources. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure that it maintains procurement documentation to document that expenditures are completed in compliance with Federal, State, and Board procurement policies and regulations. Views of Responsible Officials See Corrective Action Plan.
Procurement and Suspension and Debarment Federal Agencies: U.S. Department of Education Federal Program Name: Special Education Grants to States Assistance Listing Number: 84.027/84.173 Pass-Through Agency: State of Connecticut Department of Education Pass-Through Number: 12060-SDE64370-20977, 12060-SDE64370-20983 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: There were no controls in place to review for suspension and debarment on related procurement activities. Questioned Costs: None Context: Although testing did not reveal vendors providing services that were suspended and debarred, no documentation requirement exists for the Town to verify compliance with this requirement. Cause: The Town did not properly implement a conforming policy during the fiscal year. Effect: With the absence of a compliant documentation policy, the Town is at risk for noncompliance as it relates to all federal procurement requirements. Repeat Finding: No Recommendations: We recommend that the Town review its formal procurement policies and revise with the criteria in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials: Management agrees with this finding.
Assistance Listing Number(s): 21.027 Name of Federal Program or Cluster: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of the Treasury Name of Pass-Through Entity: Milwaukee County Department of Health and Human Services Criteria or Specific Requirement: Nonfederal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Condition: The Agency did not document procurements consistent with the standards of 2 CFR sections 200.318, 200.319, and 200.320. Cause: The Agency did not establish written policies and procedures for procurement. Effect or Potential Effect: The cost of the procurements may be disallowed. Questioned Costs: $2,000,000 Context: The Agency contracted with multiple vendors in the course of constructing a building to be used for affordable housing. Funding from this project was derived from both federal and nonfederal sources. The questioned costs represent the amount charged to this program as the required Uniform Guidance procurement procedures were not applied. Under 2 CFR 200.516(a)(3), questioned costs are those greater than $25,000 for a type of compliance requirement for a major program. Repeat Finding: No Recommendation: The Agency should establish written policies and procedures for procurement required by 2 CFR sections 200.318 through 200.326. Views of Responsible Officials: Management has established written policies and procedures for procurement. Management confirmed policies and procedures were followed and monitored during the construction of the project with supporting documentation to meet procurement requirements, however written policies and procedures were completed after year-end.
Assistance Listing Number(s): 14.239 and 21.027 Name of Federal Program or Cluster: Home Investment Partnerships Program and COVID-19 Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of Housing and Urban Development and Department of the Treasury Name of Pass-Through Entity: Milwaukee County Department of Health and Human Services Criteria or Specific Requirement: Subparts D and E of 2 CFR Part 200 require a nonfederal entity to establish written policies, procedures, and standards of conduct, including procedures to implement the cash management requirements of 2 CFR section 200.305, procedures that comply with the procurement standards of 2 CFR sections 200.318 through 200.326, and procedures for determining the allowability of costs in accordance with Subpart E of 2 CFR Part 200. Specifically, 2 CFR sections 200.430, 200.431, and 200.475 require written policies concerning compensation for personal services, fringe benefits, and travel costs, respectively. Condition: Policies and procedures with requirements in accordance with 2 CFR Part 200 for cash management, procurement, compensation, including fringe benefits, and travel were not maintained. Cause: The Agency is not aware of the requirements of Subparts D and E of 2 CFR Part 200 for written policies, procedures, and standards of conduct. Effect or Potential Effect: A lack of written policies, procedures, and standards of conduct may result in noncompliance with the requirements of federal programs and/or disallowed costs. Repeat Finding: No Recommendation: The Agency should become familiar with the requirements of Subparts D and E of 2 CFR Part 200 and establish appropriate written policies, procedures, and standards of conduct. Views of Responsible Officials: Management has established written policies and procedures after year end that were the policies and procedures followed during the year under audit and meets the requirements of Subparts D and E of 2 CFR Part 200.
In our testing of the District’s compliance with the federal rules of procurement, suspension and debarment, we noted that the District did not have polices and procedure implemented to ensure compliance with 2 CFR section 200.318 to 200.326.
Federal Transit Cluster Assistance Listing No. 20.507 US Department of Transportation Criteria or Specific Requirement: Uniform Guidance (2 CFR 200.318–200.326) requires non‑Federal entities to maintain documentation sufficient to detail the history of each procurement, including but not limited to: • Rationale for the procurement method • Contractor selection or rejection • Basis for contract price • Evidence of competition or sole‑source justification when applicable These requirements ensure transparency, competitiveness, and proper stewardship of Federal funds. Condition: During our testing of procurement transactions, we noted that the City did not retain adequate documentation to support procurement actions. Missing documentation included bid/quote evaluations, price analyses, and evidence of compliance with competitive procurement requirements. As a result, we could not determine whether procurement requirements were properly followed. Cause: Proper accounting policies and procedures were not in place related to review of documentation related to procurement of vendors. Effect or Potential Effect: Without adequate documentation, the government cannot demonstrate compliance with procurement standards. This increases the risk of noncompliance with Uniform Guidance and inefficient or noncompetitive purchasing practice. Questioned Costs: None Context: Of the four procurements tested, three lacked one or more required elements of procurement documentation. Identification as a Repeat Finding: This finding was not reported in the prior year. Recommendation: Policies and procedures over procurement should be modified to ensure that adequate documentation is maintained. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding and recommendation. Management will work to ensure proper policies and procedures are established and followed.
2025-004 U.S. Department of Agriculture Federal Financial Assistance Listing/ALN #10.855 Distance Learning and Telemedicine Grants Federal Award #IA0714-BI17 2025 Procurement, Suspension and Debarment Material Noncompliance and Material Weakness in Internal Control over Compliance Criteria: Uniform Guidance and 2 CFR §§ 200.318 through 200.326 establish the procurement standards that non-federal entities (other than states) must follow when expending federal awards. These standards require non-federal entities to maintain written procurement policies and procedures that ensure full and open competition, use of appropriate procurement methods based on dollar thresholds, and inclusion of required contract provisions as outlined in Appendix II to Part 200. Condition: The Hospital does not have a written procurement policy that conforms to the procurement standards under Uniform Guidance and 2 CFR §§ 200.318 through 200.326. In addition, testing of the Hospital’s only procurement transaction during the audit period disclosed the following instances of noncompliance: The procurement method used was not in accordance with Uniform Guidance requirements, as the contract amount exceeded the simplified acquisition threshold and a sealed bid or other allowable competitive procurement method was not obtained. The executed contract did not include all required contract provisions as prescribed byAppendix II to 2 CFR Part 200. Cause: The Hospital did not have adequately designed and implemented controls to ensure compliance with Uniform Guidance procurement requirements. Specifically, management had not established or implemented written procurement policies and procedures to guide procurement activities and to ensure contracts are reviewed for compliance with required federal provisions. Effect: As a result of the deficiencies noted above, the Hospital did not comply with Uniform Guidance procurement requirements. The absence of compliant procurement policies and procedures increases the risk of noncompliance with federal requirements and may result in the use of inappropriate procurement methods or omission of required contractual protections in federally funded contracts. Questioned Costs: Total questioned costs related to Federal Assistance Listing #10.855 amounted to $575,507, which is a known error based on the Hospital’s only procurement transaction during the audit period. Context/Sampling: The procurement policy was reviewed and one contract was tested out of a population of one total contract executed during the audit period. Repeated Finding from Prior Year(s): No. Recommendation: We recommend the Hospital develop and implement a wrien procurement policy that complies with Uniform Guidance and 2 CFR §§ 200.318 through 200.326. In addion, we recommend the Hospital establish procedures to ensure: Appropriate procurement methods are used based on applicable dollar thresholds; and All contracts funded by federal awards are reviewed to ensure inclusion of the required contract provisions outlined in Appendix II to 2 CFR Part 200. Views of Responsible Officials: Management is aware of the deficiency of internal control over the procurement, suspension and debarment direct and material requirement and subsequent to fiscal year end has implemented a formal procurement policy.
Criteria – Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition – In our testing of procurement, suspension and debarment it was identified that the District’s policy and procedures did not include periodic checks over vendors for suspension or debarment. Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections and controls were not adequately designed to ensure compliance with all of these requirements. Effect – A lack of documented policies increase the overall risk that employees are not aware of the specific requirements with contracting and awarding contracts to lower tier entities. Questioned Costs – None reported Context/Sampling – Overall procurement policy. Repeat Finding from Prior Years – No Recommendation – We recommend that management establish a written policy and procedures that addresses all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials – There is no disagreement with the audit finding.
Finding 2025-002 Significant deficiency in internal control over compliance with procurement procedures meeting the requirements of 2 CFR Part 200. Identification of the Federal Program Federal Agency: The United States Department of Housing and Urban Development Program Title: Continuum of Care Program Assistance Listing Number: 14.267 Award Numbers: All Award Periods: All Criteria Requirements contained in Title 2 U.S. Code of Federal Regulations Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Subpart D – Post Federal Award Requirements, Sections 200.318 through 200.326, require that a nonfederal entity establish and follow a written procurement policy that conforms to federal standards. The Uniform Guidance further requires that procurement transactions be documented in sufficient detail to provide a complete history of the procurement, including the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price (2 CFR 200.318(i), 200.319, and related sections). The written procurement policy must identify formal and informal procurement actions to be taken based on the size of the procurement, covering both goods and services, and must require documentation to support compliance with those requirements. Condition The Organization did not maintain adequate procurement documentation to support procurement transactions. For four out of nine of the items tested, the Organization could not provide documentation sufficient to evidence the method of procurement and that adequate price quotes were received in accordance with the Organizations documented procurement policy. Cause The Organization’s internal controls were insufficient to ensure that required procurement documentation was prepared, retained, and reviewed in accordance with its written procurement policy and Uniform Guidance requirements. Questioned Costs Not applicable. Effect The Organization did not retain documentation sufficient to comply the procurement standards set out at 2 CFR Part 200 as it related to the selected procurement transactions. Repeat Finding No
Program: Nationally Significant Freight and Highway Projects Financial Assistance Listing Number: 20.934 Federal Agency: U.S. Department of Transportation Pass-through: California Department of Transportation Award Year: 2019 Grant Award Number: INFRALUL-5459(031) Compliance Requirements: Special Tests and Provisions – Wage Rate Requirements Type of Finding: Material Weakness in Internal Control over Compliance and Material Instance of Noncompliance Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) 40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326. 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: For fifty-seven (57) out of sixty (60) weeks of certified payroll submissions selected, we noted that the City did not have appropriate internal controls in place to review the contractors’ statement of compliance of certified payroll to determine they were prepared and submitted in a timely manner. For thirty-four (34) out of sixty (60) weeks of certified payroll submissions selected, we noted that the contractor or subcontractor had not submitted on a timely basis the certified payroll weekly for each week in which the contract work was performed. Cause: The City’s procedures did not include documenting the review of the certified payroll received. In addition, the City did not have the necessary internal controls in place to ensure the contractor’s and subcontractor’s certified payroll were submitted weekly. The City’s monitoring was done on a monthly basis through April 2025 and was changed to weekly in May 2025. Effect: Ineffective controls over this area of compliance resulted in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of sixty (60) contractor work weeks out of greater than two hundred and fifty (250) were selected for testwork. Repeat Finding from the Prior Year(s): Yes, prior year finding 2024-003 Recommendation: We recommend that the City strengthen its internal controls to ensure that timely reviews of certified payroll submissions are being performed by the City. View of Responsible Officials Management agrees. See separate Corrective Action Plan.
Finding 2025-001 Federal Program: Congressional Directives Assistance Listing Number: 93.493 Compliance Requirement: Procurement Criteria or Specific Requirement: Title 2 CFR §200.318 through §200.326 requires non-Federal entities to use documented procurement procedures that provide for full and open competition and are consistent with applicable Federal standards. Specifically, 2 CFR §200.320 requires procurement transactions for construction in excess of the simplified acquisition threshold to be conducted using competitive proposals or sealed bids, unless conditions exist to justify noncompetitive procurement. Additionally, the Agency’s internal procurement policy requires competitive bidding for construction projects exceeding established dollar thresholds unless an approved exception is documented. Condition: During our audit of procurement transactions charged to the Federal program, we noted that the Agency did not obtain competitive bids for a construction project funded in part with Federal award funds. The project was awarded to a contractor without evidence that competitive proposals were solicited, evaluated, or documented. Furthermore, the Agency did not maintain documentation supporting a noncompetitive procurement justification or evidence of advance written approval as required by Uniform Guidance and internal policy. Cause: The condition appears to have resulted from inadequate internal controls over procurement compliance, including insufficient review of procurement documentation prior to contract execution and limited understanding of Uniform Guidance procurement requirements by personnel responsible for project oversight. Additionally, there has been turnover in senior leadership positions since receipt of the award and since the project began. Effect and Questioned Costs: The failure to follow Uniform Guidance procurement requirements increases the risk that Federal funds may not be used in a manner that ensures full and open competition, reasonableness of cost, and compliance with federal regulations. This condition exposes the Agency to potential disallowance of costs, repayment of federal funds, and increased scrutiny from the Federal awarding agency or pass-through entity. No questioned costs were identified as a result of this finding. Was the finding a repeat of a finding in the immediately prior year? No Recommendation: We recommend that the Agency strengthen internal controls over procurement by: 1. Ensuring all construction procurements funded by Federal awards comply with the competitive procurement requirements of 2 CFR Part 200. 2. Requiring documented evidence of bid solicitation, evaluation, and selection prior to contract award. 3. Establishing procedures to ensure noncompetitive procurements are supported by written justification and receive required approvals in advance. 4. Providing periodic training to personnel involved in procurement and project management on Uniform Guidance requirements. Management Response: The procurement of construction services funded through this award was done in early 2023 and preceded Dimock’s updated procurement policy which calls for competitive bidding. It also preceded changes in procurement leadership. Subsequent procurement for services have since been subject to competitive bidding by Dimock consistent with CFR 200.318-200.326.
Federal Agency: United States Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: Connecticut Department of Transportation, Department of Social Services, Department of Mental Health and Addiction Services, and Department of Developmental Services Pass-Through Numbers: 21DOT0015AA; 25SDRARG01TKC; 24ECD0504CAT; 24DDS0088RD Award Period: 07/01/2024-06/30/2025 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria or specific requirement: Federal regulations require that the entity must comply with procurement standards set out at 2 CFR sections 200.318 through 200.326 within Uniform Guidance. Condition: During testing of procurement standards, the auditor noted there is no procurement policy during the award period and in line with that, we noted that the conflict of interest policy of the entity does not include the essential elements as outlined in 2 CFR section 200.318. Questioned costs: None. Context: Through testing performed, it was identified that the entity does not have a procurement policy in place during the award period and that the conflict of interest policy policies do not include the essential elements as outlined in 2 CFR section 200.318. Cause: Management was unaware of the restrictive requirements of the procurement standards and was unaware that the conflict of interest policies did not contain required guidance. Effect: With the absence of a compliant policy, the entity is at risk for noncompliance as it relates to federal procurement. Repeat Finding: None. Recommendation: We recommend that management compose a procurement policy with the criteria as set out in 2 CFR sections 200.318 and 200.326. and review the conflict of interest policy and make necessary changes to comply with the criteria as set out in 2 CFR section 200.318. Views of responsible officials: Management agrees with the finding and will compose a procurement policy in line with compliance requirements and review and edit the conflict of interest policy to be in compliance.
Finding Number: 2025‐001 Repeat Finding: No Program Name/Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Agency: Department of Treasury Federal Award Number: WCG2023‐‐00008 Pass‐Through Agency: Water Infrastructure Finance Authority of Arizona Questioned Costs: N/A Type of Finding: Significant Deficiency Compliance Requirement: Procurement and Suspension and Debarment Criteria Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. Subrecipients must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. 2 CFR §§200.214 requires that vendors are checked to ensure they are not suspended or debarred from receiving federal funds. Condition The District did not follow Federal and State regulations governing procurement. Cause The District did not have policies and procedures in place to verify a vendor was not suspended or debarred. Effect The District was not in compliance with Federal and State regulations governing procurement. Context The sample was not intended to be, and was not, a statistically valid sample. For two vendors reviewed for suspension and debarment check requirements, the District did not maintain verification that the vendor was not suspended or debarred. Upon review of the vendors, neither were suspended or debarred. Recommendation The District should implement policies and procedures over procurement, specifically suspension and debarment, to ensure goods and services are procured through vendors who are not suspended or debarred, so that federal monies exceeding the formal procurement threshold are used appropriately. Views of Responsible Officials See Corrective Action Plan.
Program: CDBG-Entitlement/Special Purpose Grants Cluster Assistance Listing No.: 14.218 Federal Grantor: U.S. Department of Housing and Urban Development Passed-through: Direct Award Award No.: B-20-UC-06-0507, B-20-UW-06-0507, B-21-UC-06-0507, B-22-UC-06-0507, B-23-UC-06-0507, B-24-UC-06-0507 Award Year: 2024 Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) 40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326. 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. This includes internal controls over maintaining records of the receipt and review of certified payrolls. Condition: For one (1) of three (3) construction contracts selected for testing, we noted that the County did not obtain and review the contractors’ certified payroll submissions. Cause: The County’s procedures did not include verifying all weekly certified payrolls were obtained. Effect: Ineffective controls over this area of compliance could result in noncompliance with the wage rate compliance requirements. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A non-statistical sample of three (3) out of three (25) certified payrolls were selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County strengthen its internal controls to ensure that timely reviews of certified payroll submissions are being performed and documented by the County. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Federal Agency: U.S. Department of the Treasury; U.S. Department of Homeland Security Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds; Assistance to Firefighters Grant Assistance Listing Number: 21.027; 97.044 Federal Award Identification Number and Year: SLFRP0136-2021, EMW-2021-FG-00409 Pass-through Agency: State of Rhode Island's Pandemic Recovery Office (CSLFRF) Award Period: 3/3/21- 12/31/26, 2/28/23 - 2/27/25 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Repeat Finding: No Criteria or specific requirement The Town must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Condition The Town's purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs None Context Although the Town's purchasing policies do not include all elements as outlined in 2CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 7 of 7 procurement transactions tested. Cause The Town's has not updated its purchasing policy to fully incorporate all procurement requirements under Uniform Guidance. Effect The Town is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation We recommend that the Town updates its procurement policy to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials Management agrees with this finding.
U.S. Department of Treasury Passed through the Colorado Department of Human Services Federal Financial Assistance Listing 21.027 Award 24 IBEH 18932 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. This includes the requirements of a procurement policy and the processes that are to be followed when entering into contracts subject to procurement, suspension, and debarment. Condition: In our testing of procurement, suspension and debarment it was identified that the Organization did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326 implemented at the beginning of the fiscal year. In addition, there was no formal review of vendors to ensure they are not suspended or debarred prior to entering into transactions. Cause: Identification of the specific requirements under the Uniform Guidance and applicable CFR sections was made during the prior year audit, which occurred during fiscal year 2025. This resulted in a period of time in the fiscal year in which transactions were entered into without a compliant policy. Effect: Due to the timing of the implementation of a compliant policy, a material contract was entered into without following procurement, suspension, and debarment processes as required by Uniform Guidance. Questioned Costs: $292,562 Context/Sampling: One contract was identified as subject to procurement, suspension, and debarment requirements. That one contract was selected for testing. Repeat Finding from Prior Year: Yes, prior year findings 2024-03 and 2024-04. Recommendation: We recommend that management continuously review the now implemented policy to ensure it is in compliance with Uniform Guidance and being implemented throughout the Organization for all levels of transactions.
2025-002 Wage Rate Compliance (Repeated 2024-003) CFDA Title: Education Stabilization Fund CFDA Number: 84.425 Federal Award Number: 2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not comply with Wage Rate Requirements related to construction expenditures funded by the Education Stabilization Fund (ESSER). This condition represents a repeat finding from the prior year audit. Context: During testing of significant claims for the ESSER major program related to construction, we identified expenditures where contracts were in place or should have been in place, and the Wage Rate Requirements (Davis-Bacon related provisions) were applicable. However, required provisions and supporting documentation were not maintained. Criteria: Compliance Requirement - Education Stabilization Fund (ESSER) expenditures used for construction, are subject to Wage Rate Requirements (20 U.S.C. §1232b). In accordance with federal requirements: • All laborers and mechanics employed by contractors or subcontractors on construction contracts in excess of $2,000 funded with federal assistance must be paid wages at rates not less than those determined by the U.S. Department of Labor (DOL) (40 U.S.C. §§ 3141–3144, 3146, and 3147). • Non-federal entities are required to include prevailing wage (Davis-Bacon) provisions in all applicable construction contracts and subcontracts (29 CFR Part 5; 2 CFR §200.326). • Contractors and subcontractors must submit weekly certified payrolls, including a statement of compliance, for each week in which work is performed (29 CFR §§ 5.5 and 5.6). These requirements are incorporated into federal grant compliance standards and must be followed when federal funds are used for construction or remodeling activities. Effect: The District was not in compliance with federal Wage Rate Requirements applicable to ESSER-funded construction activities, which increases the risk that contractors and subcontractors were not compensated in accordance with federal labor standards. Cause: The District did not have sufficient processes in place to identify and implement federal compliance requirements related to construction activities, including prevailing wage requirements. This issue was also noted in the prior year, indicating that corrective actions were not fully implemented. Recommendation: The District should strengthen internal controls over federal grant compliance to ensure all applicable requirements are identified and implemented. Specifically, the District should: 1. Establish procedures to identify federal compliance requirements for all grant-funded activities, including construction-related provisions. 2. Ensure that all applicable construction contracts include required prevailing wage (Davis-Bacon) clauses for contractors and subcontractors. 3. Implement procedures to obtain and retain weekly certified payroll reports from contractors and subcontractors for all applicable projects. 4. Provide training or guidance to management and staff responsible for grant administration to ensure awareness of federal compliance requirements.
(#2025-002) Policy Updates for Uniform Guidance – CFDA No. 10.766 – Community Facilities Loans and Grants Year Ended – May 31, 2025 Direct Program Federal Agency – U.S. Department of Agriculture Criteria – the Village’s procurement policy must incorporate federal award activity within the process and procedures followed by the Village in accordance with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), sections 200.112, 200.317-200.326. Under the Uniform Guidance, the procurement requirements were required to be implemented by January 1, 2018 for federal award recipients. Condition – The Village’s code of ethics, conflict of interest and procurement policies have not been updated to comply with the requirements in the Uniform Guidance. Cause – The control environment related to the requirements of the Uniform Guidance has not be reviewed and incorporated into the Village’s control activities through the updating and documentation of the Village’s policies noted above. Effect – The Village was not in compliance with the requirements of the Uniform Guidance, Section 200.112, Conflict of Interest and Sections 200.317-200.326, Procurement Standards. Questioned Costs – There were no questioned costs noted related to this finding. Context – This finding was identified during inquiries of management in regards to the control environment over the requirements of the Uniform Guidance and through the review of the related policies noted above. Recommendation – We recommend the Village review their policies and establish/update such policies to ensure compliance with the Uniform Guidance. Village’s Response – The Village Mayor will provide an updated policy to be approved by the Village Board in 2026.
2025-005 - Procurement Criteria: In accordance with 2 CFR Section 200.319(d), non-federal entities must have their own written policies for procurement transactions. The policy should incorporate all requirements within 2 CFR section 200.318 through 200.326 of the Uniform Guidance. Condition: As of March 31, 2025, the Township did not have their own written procurement policy as required by 2 CFR section 200.318 through 200.326 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Cause: The Township was unaware of the requirement. Effect: The Township is not in compliance with the procurement policy requirements identified in 2 CFR section 200.318 through 200.326 which could jeopardize federal funding. Questioned Costs: This finding does not result in questioned costs. Recommendation: The Township should create a procurement policy that meets all the requirements of 2 CFR section 200.318 through 200.326. View of Responsible Officials: Management is in agreement and will create a procurement policy that meets all the requirements of 2 CFR section 200.318 through 200.326.
Finding 2024-002 – AL 21.027 – Significant Deficiency/Non-compliance – Procurement, Suspension and Debarment Criteria: The District should have in place written procurement standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Condition: The District does not have written procurement standards that are in accordance with the standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Cause: The District’s purchasing policy has not been updated to incorporate the standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Effect: The District is not in compliance with the procurement standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Recommendation: We recommend the District adopt a written purchasing policy to ensure the procurement standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance are incorporated. Management’s Response: North Nelson Water District has made every effort to comply with purchasing requirements. In addition to these efforts, North Nelson Water District will be adopting a formal procurement policy.
Finding 2024-002 – AL 21.027 – Significant Deficiency/Non-compliance – Procurement, Suspension and Debarment Criteria: The District should have in place written procurement standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Condition: The District does not have written procurement standards that are in accordance with the standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Cause: The District’s purchasing policy has not been updated to incorporate the standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Effect: The District is not in compliance with the procurement standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Recommendation: We recommend the District adopt a written purchasing policy to ensure the procurement standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance are incorporated. Management’s Response: North Nelson Water District has made every effort to comply with purchasing requirements. In addition to these efforts, North Nelson Water District will be adopting a formal procurement policy.
Finding 2024-002 – AL 21.027 – Significant Deficiency/Non-compliance – Procurement, Suspension and Debarment Criteria: The District should have in place written procurement standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Condition: The District does not have written procurement standards that are in accordance with the standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Cause: The District’s purchasing policy has not been updated to incorporate the standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Effect: The District is not in compliance with the procurement standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Recommendation: We recommend the District adopt a written purchasing policy to ensure the procurement standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance are incorporated. Management’s Response: North Nelson Water District has made every effort to comply with purchasing requirements. In addition to these efforts, North Nelson Water District will be adopting a formal procurement policy.
Environmental Protection Agency, passed through State of North Dakota Department of Environmental Quality Federal Financial Assistance Listing #66.468 Capitalization Grants for Drinking Water Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria - Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition - During the course of our engagement, it was identified that the District did not have a written policy on procurement that satisfied the requirements of 2 CFR sections 200.318 through 200.326. Cause - Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect - A lack of documented policies increase the overall risk that employees are not aware of the specific requirements with of procurement, suspension, and debarment. Questioned Costs – None reported Context/Sampling - Overall procurement policy. Repeat Finding from Prior Year(s) – Yes, prior year finding 2023-006 Recommendation - We recommend that management establish a written policy that addresses all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials - There is no disagreement with the audit finding.
Criteria: The Foundation is responsible for implementing policies, including internal controls, that are designed to provide reasonable assurance regarding the achievement of the following objectives: effectiveness and efficiency of operations, reliability of reporting for internal and external use; and compliance with applicable laws and regulations. Per 2 CFR 180.300 and 200.318-200.326, the Foundation is responsible for implementing policies and procedures before entering into covered transactions with vendors as well as performing competitive bidding procedures for vendors used in federal award spending. Condition: The overall process for tracking federal funds spent and the reimbursement process is a manual process performed by one department. For majority of the year the Foundation lacked formal policies for reimbursement, procurement and timely review of calculations throughout the year. Cause: The Foundation saw increased levels of federal funding during the previous year and did not have the process in place to ensure compliance until majority of the way through the year. Effect: The lack of process documentation and review process limited the Foundation’s ability to design and implement the necessary internal controls over compliance with federal awards. Questioned Costs: Indeterminable. Context: The finding represents a systematic deficiency in the Foundation’s process surrounding federal funds. This finding cannot be quantified in terms of dollar value. Repeat Finding: This is partially a repeat finding as the Foundation implemented the required policies during the year ended December 31, 2024. Recommendation: We recommend increased training in federal grant compliance and specific grant requirements. Additionally, the Foundation should continue to review and implement formal processes surrounding federal funds and the review of reimbursement requests. Views of Responsible Officials: Management concurs with the finding and implemented a comprehensive procurement policy in October 2024 compliant with federal regulations under the Uniform Guidance (2 CFR Part 200), with full staff training completed and internal monitoring controls established.
Criteria Uniform Guidance requires non-federal entities to follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. The Organization is required to adopt and maintain a written procurement policy in accordance with Uniform Guidance procurement standards and perform and document suspended and debarment searches for potential vendors prior to procuring services from the contractor. If bids are not obtained in accordance with the Organization’s procurement procedures due to using the noncompetitive procurement method, documentation must be prepared and retained including justification for sole-source procurement. Condition and Context The Organization does not have a documented procurement policy in accordance with 2 CFR Part 200. We noted four contractors that had total 2024 purchases over $10,000 and selected two for testing. We noted the following deficiencies in our testing: - For the two contractors tested, the Organization had no documentation to support that its suspension and debarment verification procedures were performed prior to procuring services from contractors. Therefore, we have concluded that such verifications were not timely performed. - The two contractors tested were selected using the noncompetitive procurement method. When the Organization relied on sole-source justification to procure services, the Organization did not document its sole-source justification prior to procuring services from the contractor. Cause The Organization assumed that following the procurement standards in 2 CFR Part 200 was a sufficient procurement policy and the Organization was not aware that a documented procurement policy in accordance with 2 CFR Part 200 was required. Further, the Organization was not aware of the necessity to document its suspension and debarment search procedures and justification for sole-source procurements prior to procuring services from contractors. Effect Without a formal procurement policy, or abidance of the documentation requirements of 2 CFR Part 200, there is an increased risk that procurement activities may not be conducted in compliance with federal requirements, potentially leading to unallowable costs or questioned costs. Questioned Cost: None due to auditor agreeing with verbal justification of sole-source procurements. Recommendation We recommend that management develop and implement a formal procurement policy that aligns with the requirements of the Uniform Guidance. We recommend that management ensure all procurement policy requirements are performed and documented prior to entering into procurement transactions. Views of Responsible Officials and Planned Corrective Actions See Correction Action Plan.
Criteria Uniform Guidance requires non-federal entities to follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. The Organization is required to adopt and maintain a written procurement policy in accordance with Uniform Guidance procurement standards and perform and document suspended and debarment searches for potential vendors prior to procuring services from the contractor. If bids are not obtained in accordance with the Organization’s procurement procedures due to using the noncompetitive procurement method, documentation must be prepared and retained including justification for sole-source procurement. Condition and Context The Organization does not have a documented procurement policy in accordance with 2 CFR Part 200. We noted four contractors that had total 2024 purchases over $10,000 and selected two for testing. We noted the following deficiencies in our testing: - For the two contractors tested, the Organization had no documentation to support that its suspension and debarment verification procedures were performed prior to procuring services from contractors. Therefore, we have concluded that such verifications were not timely performed. - The two contractors tested were selected using the noncompetitive procurement method. When the Organization relied on sole-source justification to procure services, the Organization did not document its sole-source justification prior to procuring services from the contractor. Cause The Organization assumed that following the procurement standards in 2 CFR Part 200 was a sufficient procurement policy and the Organization was not aware that a documented procurement policy in accordance with 2 CFR Part 200 was required. Further, the Organization was not aware of the necessity to document its suspension and debarment search procedures and justification for sole-source procurements prior to procuring services from contractors. Effect Without a formal procurement policy, or abidance of the documentation requirements of 2 CFR Part 200, there is an increased risk that procurement activities may not be conducted in compliance with federal requirements, potentially leading to unallowable costs or questioned costs. Questioned Cost: None due to auditor agreeing with verbal justification of sole-source procurements. Recommendation We recommend that management develop and implement a formal procurement policy that aligns with the requirements of the Uniform Guidance. We recommend that management ensure all procurement policy requirements are performed and documented prior to entering into procurement transactions. Views of Responsible Officials and Planned Corrective Actions See Correction Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
Federal Program: Airport Improvement Program Federal Award Identification Number and Year: All Airport Improvement Program awards, 2021, 2022, 2023, 2024 Assistance Listing Number (ALN): 20.106 Federal Awarding Agency: U.S. Department of Transportation Pass-through Entity: None Repeat Finding: No Material Weakness and Noncompliance – Wage Rate Requirements Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146, and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: The Airport was unable to provide documentation to support compliance with wage rate requirements in relation to AIP project 8023. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Cause and Effect: The Airport was not aware that the contracts for AIP project 8023 were applicable to prevailing wage requirements; therefore, the Airport did not obtain certified payrolls for two contracts relating to the project. Without proper controls over wage-rate requirements, there is an increased risk that the Airport, its contractors, and subcontractors are not in compliance with applicable federal regulations. Additionally, noncompliance could result in federal funding being reduced or taken away, or other sanctions imposed by the federal grantor agency. Recommendation: The Airport should implement controls and processes to ensure that all necessary information from contractors is obtained to document compliance with wage rate requirements. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.
2024-002 Procurement and Suspension and Debarment Program: Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing Number 21.027, U.S. Department of Treasury passed through the City of New Orleans, Louisiana Compliance Requirement: Procurement and Suspension and Debarment Criteria: Non-federal entities are prohibited from contracting with parties that are suspended or debarred. "Covered transactions" include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. When a non-federal entity enters into a covered transaction, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at SAM.gov, (2) receiving a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). In addition, under 2 CFR 200.326, Contract Provisions, a non-federal entity’s contracts, must contain the applicable provisions described in Appendix II to Part 200, Title 2 - Contract Provisions for non-Federal Entity Contracts under Federal Awards. Condition: During our testing of compliance with the suspension and debarment regulations, the Office was unable to provide documentation of its determination during the procurement process that the 2 of the 3 vendors selected for testing were not suspended or debarred. Based on our review of SAM.gov, these vendors were not suspended or debarred. In addition, for 2 of the 3 contracts selected for testing, the required provisions described in Appendix II to Part 200 - Contract Provisions for non-Federal Entity Contracts under Federal Awards were not included. The universe (population) from which the vendors and contracts were selected were all contracts over $25,000 with expenditures incurred during 2024 consisting of 4 contracts. Questioned Costs: None Cause: Management did not maintain documentation of the Office’s determination of whether vendors were suspended or debarred for all covered transactions. Effect: Without ensuring documentation is maintained over whether a vendor is suspended or debarred, the Office may enter into contracts with suspended or debarred parties. Recommendation: We recommend that the Office review all contracts to ensure the appropriate language exits regarding suspension and debarment regulations, and the Office should consider an annual review of SAM.gov for all vendors that are paid from federal awards. In addition, the Office should implement procedures to ensure that contracts paid with federal funds have the provision as required by Appendix II to Part 200, Title 2 - Contract Provisions for non-Federal Entity Contracts under Federal Awards. Views of responsible officials and planned corrective action: OPSO acknowledges the finding and appreciates the importance of maintaining documented verification of vendor eligibility and ensuring all federally required provisions are present in contracts funded by federal awards. We would like to clarify that the two vendors in question were not suspended or debarred according to SAM.gov records at the time of the audit. However, OPSO did not retain adequate documentation of the verification performed at the time of procurement, nor did we fully integrate all Appendix II provisions in the contract files reviewed. This deficiency did not result from intentional noncompliance but from gaps in procedural oversight and documentation retention stemming from historical procurement practices and limited internal controls over contract file completeness. Corrective Action Plan To address the finding and ensure full future compliance with 2 CFR § 180.300, § 200.326, and related guidance, OPSO has implemented the following corrective actions: 1. Contract File Documentation Protocol - Effective July 1, 2025, all procurement files for federal contracts exceeding $25,000 must include: • A printed or digitally archived screenshot of the SAM.gov record showing the vendor’s exclusion status. • A signed vendor eligibility certification form confirming the entity is not suspended, debarred, or otherwise excluded. • A signed checklist confirming inclusion of required Appendix II contract provisions. All contract files will be centrally stored and monitored by OPSO’s Procurement Division. 2. Updated Procurement Templates - OPSO has updated all procurement and contracting templates to: • Include the full list of required provisions from Appendix II to Part 200. • Add a standard Suspension and Debarment certification clause. • Automatically require review of the SAM.gov Exclusions List prior to final contract execution. 3. Staff Training and Compliance Oversight - All staff involved in procurement and grant-funded contracting were trained on federal procurement standards and suspension and debarment requirements on December 31, 2025. Refresher trainings will occur semi-annually and be required for new staff during onboarding. A pre-award compliance checklist has been instituted to ensure proper documentation and verification steps are followed and archived. 4. Post-Award Compliance Reviews - Beginning Q4 of Fiscal Year 2025, OPSO’s Internal Audit and Compliance Division will conduct quarterly reviews of all federal contract files to ensure: • Proper documentation of vendor eligibility. • Compliance with contract content requirements under 2 CFR Part 200. Findings will be reported directly to the Chief Financial Officer and Sheriff for corrective follow-up if deficiencies are found. Conclusion: OPSO remains fully committed to upholding all federal procurement and grant compliance standards. While this finding did not result in questioned costs, we recognize the risk it poses and have taken decisive action to enhance internal controls, training, and documentation standards. We appreciate the audit team’s diligence and remain available to provide any further documentation or clarification needed.
Department of the Treasury, Passed through the State of Michigan Federal Financial Assistance Listing 21.029, CPFFN0190, 2024 COVID-19 – Coronavirus Capital Projects Fund Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria – Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required. Condition – In our testing of procurement, suspension, and debarment it was identified that the Cooperative’s written policy did not address the requirements of 2 CFR sections 200.318 through 200.326. Cause – Lack of oversight, awareness, or understanding of all of the specific requirements under the Uniform Guidance and applicable CFR sections, and controls were not adequately designed to ensure compliance with all of these requirements. Effect – A lack of compliant policies increases the overall risk of non-compliance. Questioned Costs – None reported. Context/Sampling – Overall procurement policy. Repeat Finding from Prior Years – No. Recommendation – We recommend that management establish a written policy that is in compliance with all of the procurement requirements for federal programs as identified in 2 CFR sections 200.318 through 200.326 and maintain adequate supporting documentation and records to document history and methods of procurement and the procedures performed to comply with these CFR sections. Views of Responsible Officials – There is no disagreement with the audit finding.
Significant Deficiency and Material Instance of Non-Compliance: Finding 2024-001: Written Procurement Policy This finding impacts the procurement and suspension and debarment compliance requirement for the major program, Assistance Listing Number 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds funded by U.S. Department of the Treasury and passed through Massachusetts Technology Park Corporation. Criteria: According to 2 CFR 200.318–200.326, non-federal entities receiving Federal awards must establish and maintain written procurement policies and procedures. These policies must be consistent with Federal standards, including requirements for competitive bidding, documentation, and conflict-of-interest provisions. Condition: TGH did not have a written Federal procurement policy in place during 2024. Therefore, TGH did not adhere to Federal procurement requirements that ensure competitive, fair, and transparent procurement practices, nor did it implement the necessary documentation procedures to support procurement transactions. Cause: TGH’s internal control over procurement was inadequate and did not meet the specific requirements under 2 CFR 200.318. Effect: As a result of this noncompliance, there is an increased risk of improper procurement practices and the potential for misuse of Federal funds. While no improper procurements were identified during the audit, the lack of a procurement policy exposes TGH to risks of noncompliant procurement actions, such as non-competitive contracts, conflicts of interest, and insufficient documentation of procurement decisions. Was the finding a repeat of a findings in the immediate prior year?: No Questioned Costs: None Recommendation: We recommend that TGH develop and implement a written procurement policy in accordance with 2 CFR 200.318 to ensure compliance with Federal procurement requirements. The policy should include provisions for competitive bidding, applicable purchasing, procurement threshold, conflict-of-interest disclosure, and proper documentation of procurement actions. Additionally, TGH should provide training for procurement staff to ensure they understand and follow Federal procurement standards. Management Response: Management acknowledges the finding and concurs with the recommendation. TGH is in the process of developing and formalizing a comprehensive procurement policy that complies with the procurement standards outlined in 2 CFR 200.318–200.326 of the Uniform Guidance. The policy will address key areas such as allowable procurement methods, competition requirements, contract oversight, and verification against the Federal suspension and debarment list. Management anticipates that the procurement policy will be reviewed and approved by the appropriate oversight body by June 30, 2025, and staff will receive training on its implementation shortly thereafter. TGH is committed to strengthening internal controls over procurement to ensure continued compliance with Federal requirements.
Procurement, Suspension and Debarment Questioned Costs 14.218: $248,920 14.239: $1,172 Department of Housing and Urban Development 14.218 Community Development Block Grant 14.239 HOME Investment Partnership Program Grant No(s): B-21-MC-22-002,B-22-MC-22-002,B-23-MC-22-002,M-23-MC-22-0204 Criteria: Purchases made from federal grants must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). Purchases of services in excess of $250,000 should be made using one of two formal methods that are competitive and require public notice. Condition: The City-Parish paid for program management services in 2020 in the amount of $250,632 under a contract that has not recently undergone formal procurement methods. The purchases were made through amendment of an existing contract initially awarded using formal methods in 2019. Universe/ Population: These programs were not selected for audit as major programs. The contract relating to the costs were selected for audit in our general procurement compliance testing for all contracts, including those paid with federal and non-federal sources. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance with respect to this contract. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. Views of Responsible Officials: The amendment in question did not constitute a material change in the scope, nature, or intent of the original procurement. The additional funding awarded was consistent with the original services solicited and did not involve new activities or substantially alter the deliverables or performance standards initially procured. As such, the amendment fell within the bounds of the original competitive process and was not required to be procured. The City-Parish procurement policy allows for amendments when they do not exceed the original scope of work or introduce fundamentally different services. The amendment was processed with full documentation of cost reasonableness, continued eligibility under the applicable grant program and internal approval. Therefore, we assert that the contract amendment was executed in accordance with both HUD and local procurement requirements and no formal procurement was necessary. To strengthen internal controls and ensure full alignment with federal procurement requirements, the OCD will document and reinforce internal procedures outlining when procurement is or is not required for amendments within the original scope. Procurement training is ongoing. The OCD staff will conduct refresher training with procurement and program personnel on contract amendment procedures and documentation requirements. Final Auditor Comments: It is acknowledged that similar services required under the initial contract are also to be provided under the amendments to the contract (grants management services). The original contract had a term of May 1, 2019 to April 30, 2022, at an amount not-to exceed $70,000, to perform grants management services for established HUD programs such as CDBG and HOME. However, amendments to this contract, made without being competitively bid (RFP), added administration services for the Emergency Rental Assistance Program undertaken in response to the COVID-19 pandemic. These amendments brought the total not-to exceed amount to $9,054,261 for all grant management services. While the Emergency Rental Assistance Program may have qualified for emergency procurement treatment, thereby not requiring competitive procurement, the HOME and CDBG program administration services may have been required to be competitively procured after the initial contract period ending April 30, 2022.
Procurement, Suspension and Debarment Questioned Costs 14.218: $248,920 14.239: $1,172 Department of Housing and Urban Development 14.218 Community Development Block Grant 14.239 HOME Investment Partnership Program Grant No(s): B-21-MC-22-002,B-22-MC-22-002,B-23-MC-22-002,M-23-MC-22-0204 Criteria: Purchases made from federal grants must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 (the Uniform Guidance or UG). Purchases of services in excess of $250,000 should be made using one of two formal methods that are competitive and require public notice. Condition: The City-Parish paid for program management services in 2020 in the amount of $250,632 under a contract that has not recently undergone formal procurement methods. The purchases were made through amendment of an existing contract initially awarded using formal methods in 2019. Universe/ Population: These programs were not selected for audit as major programs. The contract relating to the costs were selected for audit in our general procurement compliance testing for all contracts, including those paid with federal and non-federal sources. Effect: The City-Parish may be non-compliant with the purchasing requirements of the Uniform Guidance with respect to this contract. Cause: Improper execution of established internal controls and a lack of adherence to policies. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. Views of Responsible Officials: The amendment in question did not constitute a material change in the scope, nature, or intent of the original procurement. The additional funding awarded was consistent with the original services solicited and did not involve new activities or substantially alter the deliverables or performance standards initially procured. As such, the amendment fell within the bounds of the original competitive process and was not required to be procured. The City-Parish procurement policy allows for amendments when they do not exceed the original scope of work or introduce fundamentally different services. The amendment was processed with full documentation of cost reasonableness, continued eligibility under the applicable grant program and internal approval. Therefore, we assert that the contract amendment was executed in accordance with both HUD and local procurement requirements and no formal procurement was necessary. To strengthen internal controls and ensure full alignment with federal procurement requirements, the OCD will document and reinforce internal procedures outlining when procurement is or is not required for amendments within the original scope. Procurement training is ongoing. The OCD staff will conduct refresher training with procurement and program personnel on contract amendment procedures and documentation requirements. Final Auditor Comments: It is acknowledged that similar services required under the initial contract are also to be provided under the amendments to the contract (grants management services). The original contract had a term of May 1, 2019 to April 30, 2022, at an amount not-to exceed $70,000, to perform grants management services for established HUD programs such as CDBG and HOME. However, amendments to this contract, made without being competitively bid (RFP), added administration services for the Emergency Rental Assistance Program undertaken in response to the COVID-19 pandemic. These amendments brought the total not-to exceed amount to $9,054,261 for all grant management services. While the Emergency Rental Assistance Program may have qualified for emergency procurement treatment, thereby not requiring competitive procurement, the HOME and CDBG program administration services may have been required to be competitively procured after the initial contract period ending April 30, 2022.