The procurement policy and conflict of interest policy of the Organization do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326.
The procurement policy and conflict of interest policy of the Organization do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326.
The procurement policy and conflict of interest policy of the Organization do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326.
Finding 2024-002: Procurement Federal Program Information: Department of Housing and Urban Development Continuum of Care Program, Direct funding – AL No. 14.267, Grant No. CA1320L9T142208. CA1320L9T142309, CA1255L9T142208, CA0841L9T141908, CA0773L9T142214, CA0773L9T142315, CA1317L9T132106 and CA1403L9T132106 Condition: Wipfli, LLP obtained the supporting documentation for purchases of client furnishings, cleaning services, and pest control services. The documentation indicated these vendors were selected based on best price. Turning Point of Central California, Inc. was able to provide explanations for why the vendor were selected, but procurement records supporting the explanations were not available for the pest control vendor. In addition, Wipfli noted Turning Point of Central California, Inc.’s procurement policy included references to outdated federal regulations and did not comply with all of the procurement requirements in the Uniform Guidance (2 CFR Part 200). This is a repeat finding from the June 30, 2021, 2022 and 2023 audits. Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 2 CFR Part 200, section 318(i) (Uniform Guidance) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. The records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contractor type, contractor selection or rejection, and the basis for the contract price. In addition, the Uniform Guidance, 2 CFR Part 200, section 200.118 states that the non-Federal entity must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326 and must use their own documented procurement procedures that must conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. Cause: Turning Point of Central California, Inc. did not retain procurement records to support its assertion that it is contracting with vendors that provide the best prices. Turning Point of Central California, Inc. has not updated its procurement policy to comply with the Uniform Guidance (2 CFR Part 200). Effect: Due to the conditions noted above, Turning Point of Central California, Inc. was not in compliance with the procurement regulations and there exists a material weakness in internal controls over the procurement compliance requirement. Recommendation: We recommend Turning Point of Central California, Inc. implement controls to ensure the procurement decisions are properly documented in accordance with updated internal policies and procedures that conform to the Uniform Guidance (2 CFR Part 200). View of responsible officials: Management agrees with the finding and has submitted a corrective action plan.
Finding Number: 2024-002 Repeat Finding: Similar to prior year finding 2023-003 Program Name/Assistance Listing Title: Indian School Equalization, Special Education Cluster Assistance Listing Number: 15.042, 84.027 Federal Agency: U.S. Department of the Interior, U.S. Department of Education Federal Award Number: A23AV00811 Questioned Costs: None Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment Criteria: Under 2 CFR §215.43 the School is required to implement certain procurement policies that adhere to the minimum federal requirements as outlined in 2 CFR §215.44. 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. 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 School did not always follow procurement standards as put forth in 2 CFR §200.318 through §200.326. Effect: Noncompliance with federal regulation that led to a qualified audit opinion over the listed federal programs as noted above. Cause: Management oversight. Context: For two of 25 vendors within the Simplified Acquisition Threshold tested, the School did not maintain documentation that appropriate procurement procedures were performed or provide documentation to support the School’s reasoning for a noncompetitive procurement. Recommendation: The School should review its procurement procedures to ensure that proper procurement procedures are performed documentation is maintained to support the procurement. Response: The School’s responses are presented in a separate document. Contact person: Dolores Silva, Chief Financial Officer
Finding Number: 2024-002 Repeat Finding: Similar to prior year finding 2023-003 Program Name/Assistance Listing Title: Indian School Equalization, Special Education Cluster Assistance Listing Number: 15.042, 84.027 Federal Agency: U.S. Department of the Interior, U.S. Department of Education Federal Award Number: A23AV00811 Questioned Costs: None Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment Criteria: Under 2 CFR §215.43 the School is required to implement certain procurement policies that adhere to the minimum federal requirements as outlined in 2 CFR §215.44. 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. 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 School did not always follow procurement standards as put forth in 2 CFR §200.318 through §200.326. Effect: Noncompliance with federal regulation that led to a qualified audit opinion over the listed federal programs as noted above. Cause: Management oversight. Context: For two of 25 vendors within the Simplified Acquisition Threshold tested, the School did not maintain documentation that appropriate procurement procedures were performed or provide documentation to support the School’s reasoning for a noncompetitive procurement. Recommendation: The School should review its procurement procedures to ensure that proper procurement procedures are performed documentation is maintained to support the procurement. Response: The School’s responses are presented in a separate document. Contact person: Dolores Silva, Chief Financial Officer
Criteria: The Association should have in place written procurement standards found in 2 CFR 200.317 through 200.326 of the Uniform Guidance. Condition: The Association 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 Association’s written 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 Association 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 Association update its 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: The Association will update its purchasing policy to ensure the procurement standards in 2 CFR 200.317 – 200.326 are incorporated.
Finding 2024-002 – COVID 19 – Coronavirus State and Local Fiscal Recovery Fund - AL No. 21.027 U.S. Department of Treasury Noncompliance and Material Weakness Related to Internal Control over Compliance of the Major Program 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 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. As governmental subrecipients of states they are also required to use the same state procurement policies and procedures for federal funds as for non‐federal funds, the Town is required to follow Massachusetts General Laws, Chapter (MGL) 30(b). MGL 30(b) requires the solicitation of three written or oral quotes for procurements of supplies between $10,000 and $49,999 and sealed bids or proposals for procurements of supplies $50,000 and over. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. However, a deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context: During fiscal year 2024, the Town did not comply with the required procurement policies and procedures in place as it related to expenses charged to the major program requiring procurement procedures. One of the expenses tested was for engineering services that would have been exempt under Massachusetts General Laws, Chapter (MGL) 30(b) (State Procurement Requirement), under federal statutes and procurement requirements for engineering services identified in 2 CFR Part 200, the Town would have been required to go out to bid for the services. Questioned Costs: $413,477.78 Cause: The noncompliance occurred because the organization mistakenly relied on Massachusetts Chapter 30B exemptions, which govern state and local procurements, and did not recognize the need to comply with the more stringent federal procurement requirements for federal fund usage. Staff members were not sufficiently aware of the specific requirements under 2 CFR Part 200 and the precedence of federal procurement regulations over state law in this context. Effect or Potential Effect: There is risk that the amounts charged to the federal awards major program may not be in accordance with procurement, suspension, and debarment principles. Identification as a Repeat Finding: 2023-003 Recommendation: The Town of Bellingham should address the nocompliance and material weakness in internal controls noted above in order to ensure that procurements are conducted in accordance with federal and state requirements. Management Response: We acknowledge the audit finding regarding our reliance on Massachusetts Chapter 30B exemptions for procurement involving federal funds. We understand that federal procurement regulations under 2 CFR Part 200 take precedence over state law and that we failed fully to comply with federal requirements for competitive bidding, sole-source justification, and documentation. We are committed to addressing this issue by reviewing our procurement policies to clearly differentiate between state and federal requirements, ensuring that federal standards govern all procurement involving federal funds. We will provide additional training to staff, implement stronger documentation procedures, and review past procurement to ensure full compliance moving forward.
Criteria: 2 C.F.R. § 200.326 and 2 C.F.R. Part 200, Appendix II require specific provisions and clauses to be included in non-federal entity contracts when utilizing federal funds to reimburse expenditures. Additionally, Louisiana Revised Statute (L.R.S.) 38:2224 requires that affidavit(s) be completed attesting that the public contract was not secured through employment or payment of solicitor public funds. Condition: The School Board’s contract for the Federal Emergency Management Agency (FEMA) - disaster #1603 alternate project PW 11249, did not include the provisions and clauses required for non-federal entity contracts. Additionally, affidavit(s) was not completed attesting that the public contract was not secured through employment or payment of solicitor public funds. Cause: The School Board did not include the required provisions and clauses or ensure the affidavits were properly completed. Effect: The School Board did not meet all federal compliance requirements for federally funded contracts. Additionally, the School Board was not in compliance with L.R.S. 38:2224 requiring completed affidavit(s) for public works contracts. Recommendation: The School Board should develop and implement procedures to ensure federally funded contracts include all required provisions and clauses. Additionally, the School Board should include in those federally funded contract procedures requirements that appropriate affidavits as required by L.R.S. 38:2224 be completed.
Condition: The County’s procurement policy is not in compliance with the requirements set forth in the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) at 2 CFR Part 200. Controls are ineffective to prevent failures in compliance with procurement requirements. Criteria: The Uniform Guidance at 2 CFR Part 200, specifically sections 200.318 to 200.326, establishes procurement standards and requirements for federal awards. The key principles include ensuring competition, maintaining written procurement policies, and avoiding conflicts of interest in procurement decisions. Effect: The lack of sufficient controls over procurement may result in noncompliance with federal requirements, potentially leading to disallowed costs, audit findings, and reduced funding. Recommendation: We recommend that the County revise its procurement policy (including internal control policies and procedures specific to the County) to align with the Uniform Guidance requirements. We also recommend the County provide its procurement policy in written form and regularly updated to each of its federal and state program managers to ensure proper compliance and consistent implementation. Response/Corrective Action Plan: We concur with the finding and will revise the procurement policy as well as the internal control policies and procedures specific to the County to be in alignment with the Uniform Guidance requirements. Upon completion, the new policy will be provided to all department heads to ensure proper compliance in the utilization and disbursement of federal funds.
CHILD NUTRITION CLUSTER – PROCUREMENT U.S. Department of Agriculture Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Passed Through Minnesota Department of Education Pass Through Number: 10.CNC Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Non-federal entities other than states must follow the procurement standards set out at CFR section 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 the entity maintain records sufficient to detail the history of the procurement. Condition: During our testing of the District’s procurements within the Child Nutrition program, it was noted that none of the selected procurements had sufficient documentation of the history of the transaction. Context: Forty procurement transactions were selected for testing. Federal regulations require that purchases follow documented procurement procedures, including evidence of open competition and retention of contract documentation for those procurement transactions over the District’s $3,500 micropurchase threshold. The District did not provide documentation of an open and competitive process for any of these purchases. Questioned costs: None Cause: Time pressure led to this requirement being missed. Effect: Lack of proper documentation could lead to using vendors for small purchase acquisition without ensuring comparable pricing from other vendors and justifying costs. Repeat finding: No Recommendation: We recommend that the District ensure quotes are obtained for all procurements that are above the micro-purchase threshold, and that this process is documented along with their assessments of cost analysis performed. Views of responsible officials: There is no disagreement with the finding.
SPECIAL EDUCATION CLUSTER – PROCUREMENT U.S. Department of Education Special Education Cluster Assistance Listing Number: 84.027 & 84.173 Passed Through Minnesota Department of Education Pass Through Number: H027A220087 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Non-federal entities other than states must follow the procurement standards set out at CFR section 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 the entity maintain records sufficient to detail the history of the procurement. Condition: During our testing of the District’s procurements within the Special Education program, it was noted not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Context: Five selections over the $3,500 micropurchase threshold were selected for testing. Federal regulations require that purchases above this threshold follow documented procurement procedures, including evidence of open competition and retention of contract documentation. The District did not provide documentation of an open and competitive process for four of these purchases and did not maintain the executed contract for one purchase. Questioned costs: None Cause: Time pressure led to this requirement being missed. Effect: Lack of proper documentation could lead to using vendors for small purchase acquisition without ensuring comparable pricing from other vendors and justifying costs. Repeat finding: Yes – 2023-006. Recommendation: We recommend that the District ensure quotes are obtained for all procurements that are above the micro-purchase threshold, and that this process is documented along with their assessments of cost analysis performed. Views of responsible officials: There is no disagreement with the finding.
CFDA No. 14.228 – Community Development Block Grant Year Ended – May 31, 2024 Passed Through the NEW York State Housing Trust Fund Federal Agency – U.S. Department of Housing and Urban Development 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 continue working with the consultants to update the required policies and procedures to ensure compliance during this next year.
CFDA No. 14.228 – Community Development Block Grant Year Ended – May 31, 2024 Passed Through the NEW York State Housing Trust Fund Federal Agency – U.S. Department of Housing and Urban Development 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 continue working with the consultants to update the required policies and procedures to ensure compliance during this next year.
Finding 2023-001 Noncompliance and material weakness in internal control over compliance with procurement requirements Federal Agency: Department of Housing and Urban Development Assistance Listing Number: 14.251 Assistance Listing Name: Community Project Funding Award Number: B-23-CP-WA-1530 Criteria Nonfederal entities must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. For acquisitions exceeding the simplified acquisition threshold, the nonfederal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b)(i); the competitive proposals method under the conditions specified in 2 CFR section 200.320(b)(2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). Condition and Effect During our testing of the procurement compliance requirement, we noted that the Aquarium had not performed the required procurement procedures for one of the vendors in our sample. For this one vendor the acquisition exceeded the simplified acquisition threshold. The Aquarium used a noncompetitive method to select the vendor; however, the acquisition did not meet one of the four qualifying circumstances for a noncompetitive procurement. Cause The Aquarium’s system of internal control did not operate effectively to prevent the Aquarium from incorrectly using a noncompetitive procurement process, when instead a proscribed competitive procurement process should have been followed. Context During the year under audit there was a total population of nine vendors to which the procurement compliance requirement applied. For our testing of the procurement compliance requirement, we tested a sample of two vendors from the total population of nine. As noted in the condition section above, our testing found that the Aquarium did not comply with the procurement compliance requirements for one of the vendors tested. We also noted that the procurement activity for this vendor occurred in 2017 and prior to the Aquarium seeking federal funding for the Ocean Pavilion project. Questioned Costs Payments to that one vendor during 2023 that were charged to the major federal program totaled $118,845. Repeat Finding This is not a repeat finding. Recommendation We recommend management provide training for those involved with procurement activities for acquisitions that will be charged to federal awards to ensure the Aquarium’s procurement policies and procedures are consistently applied. We also recommend management update the Aquarium’s procurement policies and procedures to ensure they incorporate the required procedures and controls to ensure compliance with the procurement requirements in 2 CFR 200 (the Uniform Guidance) for acquisitions that will be charged to federal awards. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Criteria or specific requirement: Part 2 of the Code of Federal Regulations (CFR), Sections 200.317 through 200.326 describe specific federal requirements related to procurement actions and documented procurement policies for federal award recipients. These standards require various elements, such as addressing conflicts of interests, avoiding acquisition of unnecessary or duplicative items, maintaining records sufficient to detail the history of the procurement, and conducting procurement in a manner that provides full and open competition, and adherence to the required methods of procurement for the acquisition of property and services. These Uniform Guidance standards have been updated several times in the past few years. Part 2 CFR, Section 180.300 describes federal requirements related to suspension and debarment for federal award recipients. The standards require that a federal award recipient verify that an entity with which it plans to enter into a covered transaction is not suspended and debarred. Procedures for satisfying such requirements should be documented, and evidence of such procedures should be maintained. Condition: The Organization’s procurement policy does not address all federally required elements of procurement policies under 2 CFR 200.317 through 200.326. Specifically, some of the items absent from the Organization’s procurement policy include: certain federally defined methods of procurement, open-competition clauses, and clauses related to acquisition of unnecessary and duplicative items. The Organization also does not have a written policy that specifies its suspension and debarment procedures. As a result, the Organization was not able to provide evidence that it verified a vendor with which it entered into a cover transaction was not suspended and debarred before the date it entered into the transaction with such vendor. During our audit procedures, we noted that the vendor was not suspended and debarred. Questioned costs: None Context: Based on our review of the Organization's procurement policy, we noted that several federally required elements were absent from the policy. We also noted that the Organization did not have a documented suspension and debarment policy, and as a result the Organization was not able to provide evidence that it verified a vendor with which it entered into a cover transaction was not suspended and debarred before the date it entered into the transaction with such vendor. Cause: The Organization’s procurement policy has not been revised to address all federally required elements specified in the Uniform Guidance. The Organization also does not have a documented suspension and debarment policy. Effect: The Organization is not in compliance with federal requirements related to a documented procurement policy, and documented suspension and debarment procedures. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization update its procurement policy to include all federally required elements of such policies for federal award recipients under the Uniform Guidance. We also recommend that the Organization document and maintain evidence of its suspension and debarment procedures to be in compliance with requirements specified in the Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Part 2 of the Code of Federal Regulations (CFR), Sections 200.317 through 200.326 describe specific federal requirements related to procurement actions and documented procurement policies for federal award recipients. These standards require various elements, such as addressing conflicts of interests, avoiding acquisition of unnecessary or duplicative items, maintaining records sufficient to detail the history of the procurement, and conducting procurement in a manner that provides full and open competition, and adherence to the required methods of procurement for the acquisition of property and services. These Uniform Guidance standards have been updated several times in the past few years. Part 2 CFR, Section 180.300 describes federal requirements related to suspension and debarment for federal award recipients. The standards require that a federal award recipient verify that an entity with which it plans to enter into a covered transaction is not suspended and debarred. Procedures for satisfying such requirements should be documented, and evidence of such procedures should be maintained. Condition: The Organization’s procurement policy does not address all federally required elements of procurement policies under 2 CFR 200.317 through 200.326. Specifically, some of the items absent from the Organization’s procurement policy include: certain federally defined methods of procurement, open-competition clauses, and clauses related to acquisition of unnecessary and duplicative items. The Organization also does not have a written policy that specifies its suspension and debarment procedures. As a result, the Organization was not able to provide evidence that it verified a vendor with which it entered into a cover transaction was not suspended and debarred before the date it entered into the transaction with such vendor. During our audit procedures, we noted that the vendor was not suspended and debarred. Questioned costs: None Context: Based on our review of the Organization's procurement policy, we noted that several federally required elements were absent from the policy. We also noted that the Organization did not have a documented suspension and debarment policy, and as a result the Organization was not able to provide evidence that it verified a vendor with which it entered into a cover transaction was not suspended and debarred before the date it entered into the transaction with such vendor. Cause: The Organization’s procurement policy has not been revised to address all federally required elements specified in the Uniform Guidance. The Organization also does not have a documented suspension and debarment policy. Effect: The Organization is not in compliance with federal requirements related to a documented procurement policy, and documented suspension and debarment procedures. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization update its procurement policy to include all federally required elements of such policies for federal award recipients under the Uniform Guidance. We also recommend that the Organization document and maintain evidence of its suspension and debarment procedures to be in compliance with requirements specified in the Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Part 2 of the Code of Federal Regulations (CFR), Sections 200.317 through 200.326 describe specific federal requirements related to procurement actions and documented procurement policies for federal award recipients. These standards require various elements, such as addressing conflicts of interests, avoiding acquisition of unnecessary or duplicative items, maintaining records sufficient to detail the history of the procurement, and conducting procurement in a manner that provides full and open competition, and adherence to the required methods of procurement for the acquisition of property and services. These Uniform Guidance standards have been updated several times in the past few years. Part 2 CFR, Section 180.300 describes federal requirements related to suspension and debarment for federal award recipients. The standards require that a federal award recipient verify that an entity with which it plans to enter into a covered transaction is not suspended and debarred. Procedures for satisfying such requirements should be documented, and evidence of such procedures should be maintained. Condition: The Organization’s procurement policy does not address all federally required elements of procurement policies under 2 CFR 200.317 through 200.326. Specifically, some of the items absent from the Organization’s procurement policy include: certain federally defined methods of procurement, open-competition clauses, and clauses related to acquisition of unnecessary and duplicative items. The Organization also does not have a written policy that specifies its suspension and debarment procedures. As a result, the Organization was not able to provide evidence that it verified a vendor with which it entered into a cover transaction was not suspended and debarred before the date it entered into the transaction with such vendor. During our audit procedures, we noted that the vendor was not suspended and debarred. Questioned costs: None Context: Based on our review of the Organization's procurement policy, we noted that several federally required elements were absent from the policy. We also noted that the Organization did not have a documented suspension and debarment policy, and as a result the Organization was not able to provide evidence that it verified a vendor with which it entered into a cover transaction was not suspended and debarred before the date it entered into the transaction with such vendor. Cause: The Organization’s procurement policy has not been revised to address all federally required elements specified in the Uniform Guidance. The Organization also does not have a documented suspension and debarment policy. Effect: The Organization is not in compliance with federal requirements related to a documented procurement policy, and documented suspension and debarment procedures. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization update its procurement policy to include all federally required elements of such policies for federal award recipients under the Uniform Guidance. We also recommend that the Organization document and maintain evidence of its suspension and debarment procedures to be in compliance with requirements specified in the Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: Part 2 of the Code of Federal Regulations (CFR), Sections 200.317 through 200.326 describe specific federal requirements related to procurement actions and documented procurement policies for federal award recipients. These standards require various elements, such as addressing conflicts of interests, avoiding acquisition of unnecessary or duplicative items, maintaining records sufficient to detail the history of the procurement, and conducting procurement in a manner that provides full and open competition, and adherence to the required methods of procurement for the acquisition of property and services. These Uniform Guidance standards have been updated several times in the past few years. Part 2 CFR, Section 180.300 describes federal requirements related to suspension and debarment for federal award recipients. The standards require that a federal award recipient verify that an entity with which it plans to enter into a covered transaction is not suspended and debarred. Procedures for satisfying such requirements should be documented, and evidence of such procedures should be maintained. Condition: The Organization’s procurement policy does not address all federally required elements of procurement policies under 2 CFR 200.317 through 200.326. Specifically, some of the items absent from the Organization’s procurement policy include: certain federally defined methods of procurement, open-competition clauses, and clauses related to acquisition of unnecessary and duplicative items. The Organization also does not have a written policy that specifies its suspension and debarment procedures. As a result, the Organization was not able to provide evidence that it verified a vendor with which it entered into a cover transaction was not suspended and debarred before the date it entered into the transaction with such vendor. During our audit procedures, we noted that the vendor was not suspended and debarred. Questioned costs: None Context: Based on our review of the Organization's procurement policy, we noted that several federally required elements were absent from the policy. We also noted that the Organization did not have a documented suspension and debarment policy, and as a result the Organization was not able to provide evidence that it verified a vendor with which it entered into a cover transaction was not suspended and debarred before the date it entered into the transaction with such vendor. Cause: The Organization’s procurement policy has not been revised to address all federally required elements specified in the Uniform Guidance. The Organization also does not have a documented suspension and debarment policy. Effect: The Organization is not in compliance with federal requirements related to a documented procurement policy, and documented suspension and debarment procedures. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization update its procurement policy to include all federally required elements of such policies for federal award recipients under the Uniform Guidance. We also recommend that the Organization document and maintain evidence of its suspension and debarment procedures to be in compliance with requirements specified in the Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
Finding Number: 2023-001 Repeat Finding: No Program Name / Title: Special Supplemental Nutrition Program for Women, Infants, and Children and Grants for Capital Development in Health Centers Federal Assistance Listing Number: 10.557 and 93.526 Federal Agencies: United States Department of Agriculture and and U.S. Department of Health and Human Services Federal Award Number: 22-10305 and C8ECS44546 Type of Finding: Significant Deficiency Compliance Requirement: Procurement and Suspension and Debarment Questioned Cost: No Criteria: Under 2 CFR sections 180.220 and 200.318 through 200.326, 45 CFR 75.327 through 75.334 and 45 CFR 75 Part E, the Organization is required to implement certain written Procurement and Suspension and Debarment policies and procedures that adhere to the minimum Federal Procurement standards. The Organization must use its 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 outlined in Uniform Guidance and maintain sufficient records to detail the history of procurements. Condition: Although the Organization maintained a written procurement policy, the Organization did not have adequate procurement policies in place to meet the minimum federal requirements for procurement standards and did not always follow its own procurement policies. Cause: The Organization's policy did not meet all of the minimum federal requirements under Uniform Guidance. In addition, the Organization could not provide support to demonstrate that it performed all of the necessary procurement steps and did not always retain documentation demonstrating compliance with Uniform Guidance for purchases made with federal funds. Effect: The Organization was not in compliance with federal regulations or its own policies. Recommendation: The Organization should update their procurement policy to meet the minimum federal requirements and ensure procurement policies are being followed for all procurement levels with written documentation. View of Responsible Officials: Introduction United Health Centers of the San Joaquin Valley (the "Organization") vigorously protests this finding. The Organization rigorously complies with not only federal and state procurement regulations, but also WIC regulations and the requirements found in the contract between the Organization and WIC. Additionally, numerous audits have been conducted by various entities (including audits by both WIC and the Health Resources and Services Administration (HRSA)) without any findings related to the Organization’s procurement. Finally, the Organization trains all individuals participating in the procurement process and provides guidance on procurement rules. Compliance with Regulations and WIC Program Contract The Organization’s compliance efforts are top tier. It uses many checks and balances to ensure compliance across the board with not only federal and state procurement regulations, but also WIC regulations and the requirements found in the contract between the Organization and WIC. It maintains written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts, intentionally avoids acquisition of unnecessary or duplicative items and uses surplus items instead of purchasing items when feasible. It uses full and open competition and obtains prior written authorization from the appropriate CDPH Program Contract Manager as required. The Organization maintains a narrative description of the procurement system, guidelines, rules, or regulations that is used to make purchases, which is audited by WIC for compliance. The Organization’s contract with WIC even goes above and beyond the requirements of 2 CFR § 180.220 and §§ 200.318 through 200.327. For example, the contract requires the reporting, tagging and annual inventorying of all equipment and/or property that is furnished by CDPH or purchased/reimbursed with funds provided through the contract. Upon receipt of equipment and/or property, the Organization reports the receipt to the CDPH Program Contract Manager and receives property tags for the items, then tags and logs them. For all purchases, the Organization maintains copies of all paid vendor invoices, documents, bids and other information used in vendor selection, for inspection or audit. Justifications supporting the absence of bidding (i.e., sole source purchases) are also maintained on file by the Organization for inspection or audit. Finally, although training is not required under 2 CFR § 180.220 or §§ 200.318 through 200.327, the Organization trains all pertinent staff related to procurement, the Organization’s procurement policies and procedures, the WIC contract requirements, WIC’s regulations and Uniform Guidance. This is done to ensure compliance with the principles and requirements of each of these requirements. No Prior Audit Findings Most recently, in January 2024 the Organization’s procurement policies and procedures were comprehensively audited by the federal HRSA through an Operational Site Visit to verify the status of UHC’s compliance with the relevant statutory and regulatory requirements. The HRSA audit specifically reviewed the Organization’s procurement policies and procedures, as well as reviewed documentation related to procurements during the prior three years by evaluating ten elements. This assessment evaluated written procurement procedures to ensure compliance with federal procurement standards, including a process for ensuring that all procurement costs are allowable, consistent with federal cost principles found in 45 CFR 75 Subpart E: Cost Principles. Additionally, the audit reviewed records for procurement actions paid for in whole or in part under the federal award that include the rationale for method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. This review involved documentation related to noncompetitive procurements. The audit also included evaluating the Organization’s retention of final contracts and related procurement records, consistent with federal document maintenance requirements, for procurement actions paid for in whole or in part under the federal award. Another element of the audit was to ensure that all activities and reporting requirements are being carried out in accordance with the provisions and timelines of the related contract and UHC’s own policies and procedures. Following completion of the expansive audit, HRSA’s evaluation resulted in no findings related to procurement. UHC successfully met all six elements of the Operational Site Visit audit conducted by HRSA. Conclusion In conclusion, the Organization vehemently disputes the findings presented, underscoring its unwavering commitment to stringent compliance with federal and state procurement regulations, as well as the stipulations outlined in its contract with WIC. The Organization's robust compliance mechanisms, encompassing meticulous checks and balances, written standards of conduct, and adherence to full and open competition, exemplify its dedication to procurement integrity. Furthermore, the Organization's proactive measures, such as reporting, tagging, and inventorying equipment, surpass the mandated requirements, ensuring transparency and accountability. Notably, recent audits by both WIC and the Health Resources and Services Administration (HRSA) have yielded no findings pertaining to procurement, validating the efficacy of the Organization's practices. The Organization's unwavering commitment to compliance, coupled with its comprehensive procurement protocols and ongoing training efforts, unequivocally refute any assertions of impropriety. UHC will reevaluate the audit findings and may or may not adopt a Corrective Action Plan.
Finding Number: 2023-001 Repeat Finding: No Program Name / Title: Special Supplemental Nutrition Program for Women, Infants, and Children and Grants for Capital Development in Health Centers Federal Assistance Listing Number: 10.557 and 93.526 Federal Agencies: United States Department of Agriculture and and U.S. Department of Health and Human Services Federal Award Number: 22-10305 and C8ECS44546 Type of Finding: Significant Deficiency Compliance Requirement: Procurement and Suspension and Debarment Questioned Cost: No Criteria: Under 2 CFR sections 180.220 and 200.318 through 200.326, 45 CFR 75.327 through 75.334 and 45 CFR 75 Part E, the Organization is required to implement certain written Procurement and Suspension and Debarment policies and procedures that adhere to the minimum Federal Procurement standards. The Organization must use its 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 outlined in Uniform Guidance and maintain sufficient records to detail the history of procurements. Condition: Although the Organization maintained a written procurement policy, the Organization did not have adequate procurement policies in place to meet the minimum federal requirements for procurement standards and did not always follow its own procurement policies. Cause: The Organization's policy did not meet all of the minimum federal requirements under Uniform Guidance. In addition, the Organization could not provide support to demonstrate that it performed all of the necessary procurement steps and did not always retain documentation demonstrating compliance with Uniform Guidance for purchases made with federal funds. Effect: The Organization was not in compliance with federal regulations or its own policies. Recommendation: The Organization should update their procurement policy to meet the minimum federal requirements and ensure procurement policies are being followed for all procurement levels with written documentation. View of Responsible Officials: Introduction United Health Centers of the San Joaquin Valley (the "Organization") vigorously protests this finding. The Organization rigorously complies with not only federal and state procurement regulations, but also WIC regulations and the requirements found in the contract between the Organization and WIC. Additionally, numerous audits have been conducted by various entities (including audits by both WIC and the Health Resources and Services Administration (HRSA)) without any findings related to the Organization’s procurement. Finally, the Organization trains all individuals participating in the procurement process and provides guidance on procurement rules. Compliance with Regulations and WIC Program Contract The Organization’s compliance efforts are top tier. It uses many checks and balances to ensure compliance across the board with not only federal and state procurement regulations, but also WIC regulations and the requirements found in the contract between the Organization and WIC. It maintains written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts, intentionally avoids acquisition of unnecessary or duplicative items and uses surplus items instead of purchasing items when feasible. It uses full and open competition and obtains prior written authorization from the appropriate CDPH Program Contract Manager as required. The Organization maintains a narrative description of the procurement system, guidelines, rules, or regulations that is used to make purchases, which is audited by WIC for compliance. The Organization’s contract with WIC even goes above and beyond the requirements of 2 CFR § 180.220 and §§ 200.318 through 200.327. For example, the contract requires the reporting, tagging and annual inventorying of all equipment and/or property that is furnished by CDPH or purchased/reimbursed with funds provided through the contract. Upon receipt of equipment and/or property, the Organization reports the receipt to the CDPH Program Contract Manager and receives property tags for the items, then tags and logs them. For all purchases, the Organization maintains copies of all paid vendor invoices, documents, bids and other information used in vendor selection, for inspection or audit. Justifications supporting the absence of bidding (i.e., sole source purchases) are also maintained on file by the Organization for inspection or audit. Finally, although training is not required under 2 CFR § 180.220 or §§ 200.318 through 200.327, the Organization trains all pertinent staff related to procurement, the Organization’s procurement policies and procedures, the WIC contract requirements, WIC’s regulations and Uniform Guidance. This is done to ensure compliance with the principles and requirements of each of these requirements. No Prior Audit Findings Most recently, in January 2024 the Organization’s procurement policies and procedures were comprehensively audited by the federal HRSA through an Operational Site Visit to verify the status of UHC’s compliance with the relevant statutory and regulatory requirements. The HRSA audit specifically reviewed the Organization’s procurement policies and procedures, as well as reviewed documentation related to procurements during the prior three years by evaluating ten elements. This assessment evaluated written procurement procedures to ensure compliance with federal procurement standards, including a process for ensuring that all procurement costs are allowable, consistent with federal cost principles found in 45 CFR 75 Subpart E: Cost Principles. Additionally, the audit reviewed records for procurement actions paid for in whole or in part under the federal award that include the rationale for method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. This review involved documentation related to noncompetitive procurements. The audit also included evaluating the Organization’s retention of final contracts and related procurement records, consistent with federal document maintenance requirements, for procurement actions paid for in whole or in part under the federal award. Another element of the audit was to ensure that all activities and reporting requirements are being carried out in accordance with the provisions and timelines of the related contract and UHC’s own policies and procedures. Following completion of the expansive audit, HRSA’s evaluation resulted in no findings related to procurement. UHC successfully met all six elements of the Operational Site Visit audit conducted by HRSA. Conclusion In conclusion, the Organization vehemently disputes the findings presented, underscoring its unwavering commitment to stringent compliance with federal and state procurement regulations, as well as the stipulations outlined in its contract with WIC. The Organization's robust compliance mechanisms, encompassing meticulous checks and balances, written standards of conduct, and adherence to full and open competition, exemplify its dedication to procurement integrity. Furthermore, the Organization's proactive measures, such as reporting, tagging, and inventorying equipment, surpass the mandated requirements, ensuring transparency and accountability. Notably, recent audits by both WIC and the Health Resources and Services Administration (HRSA) have yielded no findings pertaining to procurement, validating the efficacy of the Organization's practices. The Organization's unwavering commitment to compliance, coupled with its comprehensive procurement protocols and ongoing training efforts, unequivocally refute any assertions of impropriety. UHC will reevaluate the audit findings and may or may not adopt a Corrective Action Plan.
Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP3395, 2023 Award Period: 1/1/2023 – 12/31/2026 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters 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: In our testing for the COVID-19 State and Local Fiscal Recovery Funds procurements, it was noted that not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Questioned Costs: ALN 21.027 - $33,266.48 Context: Out of five procurement which were tested, we noted two for which the City did not retain documentation detailing the history of the procurement, including the rationale for choosing the particular vendor. Cause: These procurements occurred prior to the City implementing its new Uniform Guidance for Federal Awards policy. Effect: The City was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes, 2022-003. Recommendation: We recommend the City 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 and planned corrective actions: There is no disagreement with the audit finding. The City will work with their departments utilizing federal dollars to ensure the proper procurement method is utilized for all procurements and that documentation of that process is retained so it’s clear what considerations were made in the procurement decision.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. 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 depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.
U.S. Department of Treasury passed through Utah Governor’s Office of Economic Opportunity 2023-001 - Procurement and Suspension and Debarment Program Name of Federal Program (ALN Number): Coronavirus State and Local Fiscal Recover Funds (21.027) Criteria: Recipients of federal awards must follow the procurement standards set out at 2 CFR section 200.317 through 200.326. They must use their own documented procurement procedures, which reflect applicable State laws and regulations, provided that the procedures conform to applicable Federal law and the procurement requirements identified in 2 CFR part 200. Recipients “must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price” 2 CFR section 200.318(i). The District’s procurement procedures include the requirement to maintain sufficient documentation of the history of procurement. The District also has procedures to identify procurement transactions requiring competitive bids or proposals. Context and Condition: We selected two contracts to test for compliance with procurementstandards. Records for one contract lacked documentation sufficient to detail procurement history. Cause: The District did not follow its documentation policy for obtaining contracts or bids. Effect: A potential failure to conduct procurement transactions in a manner providing full and open competition exists. Questioned Costs: No costs were questionable Repeat finding: No Statistically valid: Yes Recommendation: We recommend the District ensure it 1) maintains documentation of the history of procurement and 2) monitors compliance with documentation requirements. Views of responsible officials: The District will review its procurement policies and internal controls and ensure timely action is taken when noncompliance is identified.
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 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. Questioned Costs: None Condition: The Foundation was able to provide a procurement policy, but it was not in accordance with the Federal procurement requirements within Uniform Guidance. Cause: The Foundation does not have internal controls in place surrounding procurement policies and procedures. Effect: We were unable to test procurement due to lack of a procurement policy in accordance with Uniform Guidance. The lack of internal controls surrounding the procurement policies and procedures could lead to potential funding issues in the future. Recommendation: We recommend that management continue to implement additional control processes in order to ensure proper controls are in place and followed. Foundation Response: Management agrees with the finding.
Criteria: The Code of Federal Regulations (CFR) Section 200.318 - 200.326 require written policies concerning methods of procurement for goods and services. Condition: The Foundation did not have a written procurement policy that included all of the required elements during 2023. Cause: This is the first year that the Foundation was required to have a Single audit and as such is still in the process of developing and adopting specific policies and procedures to ensure its internal practices are in alignment with the Uniform Guidance. Effect: The Foundation is not in compliance with Section 200.318 - 200.326 of the Code of Federal Regulations. Auditor’s Recommendation: We recommend that the Foundation adopt a formal written procurement policy in the format and with the elements required by 2 CFR Sections 200.318 to 200.326. Views of Responsible Officials and Planned Corrective Actions: The Foundation’s management team agrees with this finding and remains fully committed to both developing and adopting specific procurement policies for federal expenditures which will better ensure its internal practices are in alignment with the Uniform Guidance.
Department of Treasury Federal Financial Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Immaterial Instance of Noncompliance 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 City 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 contracting and awarding contracts to lower tier entities. Questioned Costs – None reported Context/Sampling – All vendors, which totaled one, were selected for procurement testing. Repeat Finding from Prior Years – No Recommendation – Management should 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. View of responsible officials – Management is in agreement with the finding.
Department of Treasury Federal Financial Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension, and Debarment Material Weakness in Internal Control over Compliance and Immaterial Instance of Noncompliance 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 City 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 contracting and awarding contracts to lower tier entities. Questioned Costs – None reported Context/Sampling – All vendors, which totaled one, were selected for procurement testing. Repeat Finding from Prior Years – No Recommendation – Management should 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. View of responsible officials – Management is in agreement with the finding.
Department of the Treasury, Passed through North Dakota Office of Management and Budget Federal Financial Assistance Listing 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds 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 City 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 compliant policies increases the overall risk of non-compliance. Questioned Costs – None reported. Context/Sampling – Overall procurement policy. Repeat Finding from Prior Years – Yes, prior year finding 2022-007. 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.
Identification of the federal program U.S. Department of Commerce Economic Development Cluster Assistance Listing Number 11.307 Economic Adjustment Assistance Federal Award Number – 08-79-05441 Award Period – 7/12/2021 – 7/11/2026 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Criteria or specific requirement (including statutory, regulatory, or other citation) (continued) Per the May 2023 OMB Compliance Supplement, “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). This reporting is often done using Optional Form WH-347, which includes the required statement of compliance (OMB No. 1235-0008).” Condition Texas Biomed did not obtain the required weekly certified payrolls from contractors and subcontractors for each week in which work was performed. Texas Biomed did not include the required provision that the contractor or subcontractor comply with the wage rate requirements in 1 of 5 selected construction contracts. Cause Texas Biomed did not have effective internal controls and procedures in place to ensure Texas Biomed complied with wage rate requirements. Effect or potential effect Texas Biomed did not comply with the wage rate requirements noted above. As a result, Texas Biomed did not have the ability to review required certified payroll reports to ensure contractors and subcontractors are paying prevailing wage rates. Questioned costs None. Context EY selected and tested 5 of 28 contractors and subcontractors in relation to the Economic Development Cluster. For 3 contractors/subcontractors, Texas Biomed did not obtain certified payrolls. For 2 contractors/subcontractors, Texas Biomed obtained minimal certified payrolls which did not cover the period in which work was performed. Texas Biomed did not include the required provision that the contractor or subcontractor comply with the wage rate requirements in 1 of 5 selected construction contracts. All of the expenditures for the Economic Development Cluster were for construction costs, including the $4,000,000 federal grant and Texas Biomed’s $6,000,000 match. Identification as a repeat finding, if applicable This is not a repeat finding. Recommendation We recommend Texas Biomed design and implement internal controls to ensure weekly certified payrolls are obtained from contractors and subcontractors and the required wage rate provisions are included in contracts for federally funded construction grants, as required. Views of responsible officials Management agrees with the finding and will implement controls to ensure compliance with Wage Rate Requirements.
Condition: The Organization has a procurement policy; however, the policy does not include all the elements required by the Uniform Guidance (UG). The policy should detail, among other items, thresholds and procedures for each of the five procurement methods. Criteria: 2 CFR section 200.318 through 200.326 outlines the procurement standards and the elements that should be included in the Organization’s policy. Cause: Historically, the Organization has not received a significant amount of federal grants, and therefore, the current procurement policy has not recently reviewed to ensure it complies with the elements required by the UG. Effect: The effect is unknown. Recommendation: We recommend the Organization update its procurement policy with all the elements required by the UG. Views of Responsible Officials: The Organization agrees with the recommendation. The procurement policy was updated in August 2024 with all the elements required by the UG.
Federal Program - 594 Environmental Infrastructure Assistance Program (AL 12.U01): Procurement, Suspension, and Debarment; Criteria - Per Uniform Guidance, “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 section 200.318 through 200.326. They must use their own documented procurement procedures, which reflect appliable 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. Furthermore, “Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Condition - During testing, we noted that the City does not have a procurement policy in place that follows Uniform Guidance. Also, we noted that the City entered into two covered transactions with vendors who were not reviewed for suspension and debarment before entering into these transactions. Questioned Costs - None. Context - The City does not have a procurement policy that follows Uniform Guidance. Also, we tested two vendors who were not reviewed for suspension and debarment from a population of two. Cause - Management Oversight. Effect - The City is not in compliance with Uniform Guidance. Also, there is an increased risk of the City entering into a covered transaction with an entity that is suspended or debarred from receiving federal funds. Repeat Finding - Yes. Prior audit finding 2022-004. Recommendation - The City should implement a written procurement policy that follows Uniform Guidance. Furthermore, vendors should be reviewed for suspension and debarment before entering into a covered transaction. View of Responsible Officials - The City agrees with the recommendation.
Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample Repeat Finding: Yes (2022-002) Finding Type: Material Weakness, Material Noncompliance Criteria Reporting Per 2 CFR 200.502, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non Federal statutes, regulations and the terms and conditions of Federal awards, such as: expenditures/expense transactions associated with awards including grants. Further, the Uniform Guidance compliance supplement notes, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the Federal awarding agency. In accordance with the grant agreement and the reporting requirements for the State of New Jersey Department of Community Affairs, direct grants and pass through funds are fulfilled utilizing an advanced payment method and tracking reports. The grantee shall submit quarterly financial reports, in a format to be provided by the Department, and including the number of government full time employees responding to COVID 19 as supported by this funding. The reports are prepared and submitted to allow for relevant and reliable information to be provided to the Federal government or State of New Jersey for tracking purposes. The reports are the source documents for the grantee to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the grantee’s financial statements in accordance with 2 CFR 200.502, Basis for determining Federal awards expended, for the SEFA. Procurement 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 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. A non Federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis Bacon Act)). Small purchase procedures are used for purchases that exceed the micro purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro purchases may be awarded without soliciting competitive quotations if the non Federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). In accordance with the grant agreement and the reporting requirements for the State of New Jersey Department of Community Affairs, recipients may use award funds to enter into contracts to procure goods and services necessary to implement one or more of the eligible purposes outlined in sections 602(c) and 603(c) of the Act and Treasury’s Interim Final Rule and Final Rule. As such, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. Under the program, St. Joseph’s Health, Inc. must follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. Internal Control Additionally, in accordance with Federal requirements, a non Federal entity shall maintain internal controls over Federal programs designed to provide reasonable assurance that transactions are executed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and material effect on a Federal program. Condition and Context Reporting On a quarterly basis, St. Joseph’s Health, Inc. (the System) prepares and reports to New Jersey Department of Community Affairs (the Department) the program expenditures for Federal funding amounts on the tracking report of expenditures, which are then used to prepare the annual SEFA in conjunction with the general ledger detail at the end of the fiscal year. While expenditures per the SEFA as prepared by the System were accurate and the quarterly reporting was accepted by the State, the System’s expenditures per the report of expenditures were based upon purchase order amounts, which include expenditures that were incurred subsequent to year end. Procurement Further, the System engaged multiple vendors for several projects under the G2022 09 grant that were above the $10K micro purchase threshold, but below the simplified acquisition threshold. However, the System did not obtain multiple quotes from different vendors to encourage fair competition in the market. The System’s policies and procedures to ensure compliance with the above compliance requirements did not include certain internal controls that were designed properly and operating effectively to ensure that the System properly reported costs on the report of expenditures or obtained the necessary quotes from potential bidders for procurements over the micro purchase threshold. Cause Management’s review of the submitted quarterly report of expenditures did not identify the need for a reconciliation of incurred expenditures and purchase order balances reported to the Department and as such, as there is a variance between the amounts reported on the SEFA and the amounts reported to the Department on the quarterly reports of approximately $458 thousand. We noted, however that this variance did not represent any unallowable costs. Additionally, Management did not retain or obtain the required documentation indicating quotes from multiple vendors were obtained for the ongoing construction projects under the grant. Effect The System had a material variance in the amount of expenditures reported to the Department as compared to the SEFA and did not obtain multiple quotations from vendors when making selections for various projects ongoing under the Federal program. Questioned Costs None Recommendation Reporting We recommend that the System strengthen its processes and internal controls to ensure the tracking of each report of expenditures provided to the Department has a reconciliation of the amount of expenditures incurred in the period based upon the general ledger and accounting records, used to prepare the annual SEFA, as compared to the purchase order balances. Procurement We recommend that the System strengthen its processes and internal controls to ensure that all procurement related transactions are supported by the appropriate bidding documentation as required by the Uniform Guidance for each respective bidding threshold. View of Responsible Official Management agrees with the auditor's recommendations and will strengthen its processes and internal controls to ensure the report of expenditures provided to the Department has a reconciliation of the amount of expenditures incurred in the period compared to the purchase order balances and all procurement transactions contain the required bidding documentation fro each bidding threshold in accordance with the Uniform Guidance.
Procurement, Suspension and Debarment Questioned Costs: $729,080 Department of the Treasury 21.027 Coronavirus State and Local Fiscal Recovery Program (SLFR) Grant No(s): N/A Criteria: Grant recipients must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. Purchases of equipment greater than $250,000 should be made using the sealed bid method. Condition: The City-Parish purchased Ford Explorers in the amount $729,080 without undergoing the bid process. Universe/ Population: Fourteen contracts totaling $24,633,089 were subjected to compliance testing. One contract for $729,080 was found to be noncompliant. Effect: Fourteen contracts totaling $24,633,089 were subjected to compliance testing. One contract for $729,080 was found to be noncompliant. Cause: The City-Parish has experienced turnover in the purchasing division in recent years. Recommendation: The City-Parish should strengthen controls to ensure all purchases undergo the appropriate competitive procurement processes. View of Responsible Official: Purchasing Department has implemented the following corrective actions to avoid this in the future: requisition checklist outlining guideline for compliance; creating standard operating procedure for purchase of vehicles for City-Parish Agencies; conduct routine departmental training; ensure that supervisor approvals prior to bid release.
2023-005 Finding – Federal Award Type: Procurement – Material Non-Compliance and Material Weakness in Internal Control over Compliance. Identification of Federal Program: Research and Development Cluster: AL Number: 81.086 Conservation Research and Development Program Criteria / Requirement: Per 2 CFR sections 200.318 through 200.326 an entity receiving federal funds must follow 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 / Context: During the audit it was noted that Forth had established a Procurement Policy which incorporated procurement requirements identified in 2 CFF Part 200. However, of the 3 items selected for testing did not follow the Procurement Policy. Cause: While the Procurement Policy is documented, the procedures and policies were not being followed. Effect: Failure to maintain sufficient internal controls and proper procedures may result in wrongful use of federal funds and non-compliance with federal awards. Questioned Costs: None. Recommendation: The Organization should follow establish written policies and procedures regarding procurement and properly document the process for each procurement made. Management’s response: We agree with the auditor’s comments and the following actions have been taken to improve the situation. We hired a Contracts & Compliance Manager in 2024 who is now responsible for ensuring the procurement process is properly documented for each procurement made.
2023 - 001 No Documented Procurement Procedures Federal Agency: U. S. Department of Environmental Protection Federal program: Capitalization Grants for Drinking Water State Revolving Fund - Assistance Listing Number - 66.468 Compliance Requirement: Procurement, Suspension, and Disbarment Type of finding: Compliance • Criteria: Nonfederal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out in the Code of Federal Regulation (CFR) section 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. • Statement of Condition: The Borough does have a procurement policy; however, the policy is not in conformity with the requirements of 2 CFR part 200. During our testing of compliance with procurement guidelines, no further deviations from federal guidelines were noted. • Statement of Cause: The Borough was unaware that their adopted procurement policy was outdated and did not conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. • Possible Asserted Effect: Without documented procurement procedures that follow Uniform Guidance, it is difficult to ensure compliance with relevant compliance requirements. • Questioned Costs: None noted. • Context: Per review of the general procurement standards of the Uniform Guidance and the related OMB Compliance Supplement, non-federal entities are required to have their own documented procurement procedures. While the Organization does have a procurement policy, the policy does not contain the information and documentation required by the applicable federal statutes and the procurement requirements identified in 2 CFR part 200. • Repeat Finding: No • Recommendation: The Borough should establish documented procedures and policies related to federal procurements that should be used in connection with all expenditures of federal awards. • Views of Responsible Officials and Planned Corrective Action: The Borough, in consultation with our solicitor, will develop and implement a procurement policy to be used when purchasing goods and services in connection with expenditures incurred under any federal awards and/or contracts.
Federal Agency: U.S. Department of Health and Human Services Assistance Listing Numbers: 93.550 & 93.623 Federal Program Titles: Transitional Living for Homeless Youth; Basic Center Grant Award Period: October 1, 2022 through September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations 2 CFR 200.318, General procurement standards, requires that non-Federal entities must have documented procurement procedures, consistent with State and local laws and regulations for the acquisition of property or services required under a federal award and subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.318 through 200.326. Condition: During our testing, we noted that the Organization’s procurement policy did not address all of the identified requirements in 2 CFR 200.318 through 200.326. Questioned Costs: None. Context: In our review of the current procurement policy, The Adams Group, LLC noted the following: The policy did not include documented procedures for purchases above the simplified acquisition threshold ($250,000) in accordance with 2 CFR 200.320b. The policy did not include documented procedures for the use and instances of noncompetitive procurement in accordance with 2 CFR 200.320c. The policy did not include documented procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded as outlined in 2 CFR sections 200.212 and 200.318. We also noted that the Organization did not verify that the entities with which it entered into contracts were not debarred, suspended, or otherwise excluded. Effect: The Organization’s procurement policy is not in compliance with general procurement standards, and proper verification procedures for potentially suspended or debarred entities were not performed. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization update their procurement policy to address all requirements identified in 2 CFR 200.318 through 200.326. Views of Responsible Officials: Management agrees with the finding.
Federal Agency: U.S. Department of Health and Human Services Assistance Listing Numbers: 93.550 & 93.623 Federal Program Titles: Transitional Living for Homeless Youth; Basic Center Grant Award Period: October 1, 2022 through September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations 2 CFR 200.318, General procurement standards, requires that non-Federal entities must have documented procurement procedures, consistent with State and local laws and regulations for the acquisition of property or services required under a federal award and subaward. The non-Federal entity’s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.318 through 200.326. Condition: During our testing, we noted that the Organization’s procurement policy did not address all of the identified requirements in 2 CFR 200.318 through 200.326. Questioned Costs: None. Context: In our review of the current procurement policy, The Adams Group, LLC noted the following: The policy did not include documented procedures for purchases above the simplified acquisition threshold ($250,000) in accordance with 2 CFR 200.320b. The policy did not include documented procedures for the use and instances of noncompetitive procurement in accordance with 2 CFR 200.320c. The policy did not include documented procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded as outlined in 2 CFR sections 200.212 and 200.318. We also noted that the Organization did not verify that the entities with which it entered into contracts were not debarred, suspended, or otherwise excluded. Effect: The Organization’s procurement policy is not in compliance with general procurement standards, and proper verification procedures for potentially suspended or debarred entities were not performed. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization update their procurement policy to address all requirements identified in 2 CFR 200.318 through 200.326. Views of Responsible Officials: Management agrees with the finding.