2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR part 200 of the Uniform Guidance. 2 CFR §§ 200.318 through 200.326 of the Uniform Guidance outline procurement requirements for all non-payroll direct expenditures. Entities expending federal monies are required to follow Uniform Guidance procurement standards. 2 CFR 200.318(i) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The School District considered the contracts with Educational Service Centers to be noncompetitive procurements; however, the School District was unable to provide documentation that they met the criteria established in 2 CFR 200.320(c) to be considered as such. Due to a lack of internal controls over federal procurement documentation, the District did not properly maintain required supporting documentation. Failure to follow federal procurement standards, may result in the misuse of public funds, loss of "low risk auditee" status, increased audit expenses, loss of future federal awards, findings for recovery or other audit adjustments. The School District should review and follow the established Procurement policy to ensure proper procurement procedures are followed and sufficiently documented.
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR part 200 of the Uniform Guidance. 2 CFR §§ 200.318 through 200.326 of the Uniform Guidance outline procurement requirements for all non-payroll direct expenditures. Entities expending federal monies are required to follow Uniform Guidance procurement standards. 2 CFR 200.318(i) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The School District considered the contracts with Educational Service Centers to be noncompetitive procurements; however, the School District was unable to provide documentation that they met the criteria established in 2 CFR 200.320(c) to be considered as such. Due to a lack of internal controls over federal procurement documentation, the District did not properly maintain required supporting documentation. Failure to follow federal procurement standards, may result in the misuse of public funds, loss of "low risk auditee" status, increased audit expenses, loss of future federal awards, findings for recovery or other audit adjustments. The School District should review and follow the established Procurement policy to ensure proper procurement procedures are followed and sufficiently documented.
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR part 200 of the Uniform Guidance. 2 CFR §§ 200.318 through 200.326 of the Uniform Guidance outline procurement requirements for all non-payroll direct expenditures. Entities expending federal monies are required to follow Uniform Guidance procurement standards. 2 CFR 200.318(i) states that the non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. The School District considered the contracts with Educational Service Centers to be noncompetitive procurements; however, the School District was unable to provide documentation that they met the criteria established in 2 CFR 200.320(c) to be considered as such. Due to a lack of internal controls over federal procurement documentation, the District did not properly maintain required supporting documentation. Failure to follow federal procurement standards, may result in the misuse of public funds, loss of "low risk auditee" status, increased audit expenses, loss of future federal awards, findings for recovery or other audit adjustments. The School District should review and follow the established Procurement policy to ensure proper procurement procedures are followed and sufficiently documented.
2024-003 Wage Rate Compliance CFDA Title: Education Stabilization Fund CFDA Number: 84.425 Federal Award Number and Year: 2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not comply with the wage rate compliance related to construction using Education Stabilization Fund (ESSER) Grant monies. Context: During the testing of significant claims for the ESSER major programs related to construction, we noted claims in which there should be contracts in place and that the wage rate requirements would apply. Criteria: Section 7007 construction funds, as well as any Section 7002 or 7003(b) funds spent for construction or minor remodeling, are subject to Wage Rate Requirements (20 USC 1232b). Compliance Requirement – 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). Non-federal 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 non-Federal 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). Effect: Noncompliance with the Wage Rate Requirement for construction paid for out of the ESSER Grants. Cause: The District was not aware of the requirement. Recommendation: The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented: 1. Any construction vendor is by contract, and that contract includes the Prevailing Wage clauses for the contractors and subcontractors. 2. The weekly certified payrolls are submitted to the District.
2024-003 Wage Rate Compliance CFDA Title: Education Stabilization Fund CFDA Number: 84.425 Federal Award Number and Year: 2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not comply with the wage rate compliance related to construction using Education Stabilization Fund (ESSER) Grant monies. Context: During the testing of significant claims for the ESSER major programs related to construction, we noted claims in which there should be contracts in place and that the wage rate requirements would apply. Criteria: Section 7007 construction funds, as well as any Section 7002 or 7003(b) funds spent for construction or minor remodeling, are subject to Wage Rate Requirements (20 USC 1232b). Compliance Requirement – 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). Non-federal 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 non-Federal 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). Effect: Noncompliance with the Wage Rate Requirement for construction paid for out of the ESSER Grants. Cause: The District was not aware of the requirement. Recommendation: The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented: 1. Any construction vendor is by contract, and that contract includes the Prevailing Wage clauses for the contractors and subcontractors. 2. The weekly certified payrolls are submitted to the District.
2024-003 Wage Rate Compliance CFDA Title: Education Stabilization Fund CFDA Number: 84.425 Federal Award Number and Year: 2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not comply with the wage rate compliance related to construction using Education Stabilization Fund (ESSER) Grant monies. Context: During the testing of significant claims for the ESSER major programs related to construction, we noted claims in which there should be contracts in place and that the wage rate requirements would apply. Criteria: Section 7007 construction funds, as well as any Section 7002 or 7003(b) funds spent for construction or minor remodeling, are subject to Wage Rate Requirements (20 USC 1232b). Compliance Requirement – 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). Non-federal 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 non-Federal 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). Effect: Noncompliance with the Wage Rate Requirement for construction paid for out of the ESSER Grants. Cause: The District was not aware of the requirement. Recommendation: The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented: 1. Any construction vendor is by contract, and that contract includes the Prevailing Wage clauses for the contractors and subcontractors. 2. The weekly certified payrolls are submitted to the District.
2024-003 Wage Rate Compliance CFDA Title: Education Stabilization Fund CFDA Number: 84.425 Federal Award Number and Year: 2021 Federal Agency: U.S. Department of Education Pass-through Entity: Montana Office of Public Instruction Condition: The District did not comply with the wage rate compliance related to construction using Education Stabilization Fund (ESSER) Grant monies. Context: During the testing of significant claims for the ESSER major programs related to construction, we noted claims in which there should be contracts in place and that the wage rate requirements would apply. Criteria: Section 7007 construction funds, as well as any Section 7002 or 7003(b) funds spent for construction or minor remodeling, are subject to Wage Rate Requirements (20 USC 1232b). Compliance Requirement – 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). Non-federal 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 non-Federal 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). Effect: Noncompliance with the Wage Rate Requirement for construction paid for out of the ESSER Grants. Cause: The District was not aware of the requirement. Recommendation: The District should implement internal controls to determine the federal compliance requirements of all federal funds received. In addition, procedures should be implemented to ensure any federal funds received in which the Wage Rate Requirement is required the following are implemented: 1. Any construction vendor is by contract, and that contract includes the Prevailing Wage clauses for the contractors and subcontractors. 2. The weekly certified payrolls are submitted to the District.
Finding 2024-001 – COVID 19 – Coronavirus State and Local Fiscal Recovery Fund - AL No. 21.027 U.S. Department of Treasury Other Matters 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. Condition and Context: During our testing as it related to compliance with procurement we noted that an expense for engineering services for the Waste Water Treatment Assessment services charged to the major program would have required a formal bidding process as the project exceeded the simplified acquisition threshold. The Town had selected the engineering company for “On Call” engineering services as it related to the DPW through a request for qualifications process. The contract does include as part of the services to be provided Waste Water Treatment Assessment services. However, the contract is not specific to federally funded projects. The Town of Medfield had submitted the request for qualifications documentation as well as the executed contracted for “On Call” services to both the Town’s consulting service and the pass through entity for approval of the Waste Water Treatment Assessment. The pass through entity and the pass through entities Auditors did not have any concerns with the request for qualifications as it relates to the Waste Water Treatment Assessment project. Questioned Costs: $40,500 Cause: Based on the judgement of the pass through entity (Norfolk County) and their auditors, the Town was approved to procure engineering services for the Waste Water Treatment Assessment as part of a larger “On Call” services contract. The Town did select the contractor through a competitive request for qualifications process, but did not initiate a separate procurement for the sub-project. Effect or Potential Effect: There is risk that amounts charged to the federal awards major program may not be in accordance with procurement, suspension, and debarment principles. Identification as a Repeat Finding: N/A Recommendation: Going forward, the Town of Medfield should consider a separate bidding process for expenses related to federal grant funds. Management Response: Due to the differences in the interpretation of federal requirements regarding competitive procurement, the Town will follow the more restrictive one on an ongoing basis. New projects paid for by federal grants will have separate procurements.
2024-004 Procurement Federal Agency: All Federal Agencies - US Department of Transportation Federal Program Name: All Federal Programs Assistance Listing Number: All Assistance Listing Numbers - 20.205 Federal Award Identification Number and Year: N/A – applies to all Federal Programs Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matter Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UG) requires compliance with the provisions of procurement, suspension, and debarment. Condition: The Town’s procurement standards do not include the essential elements as outlined in 2 CFR sections 200.318 through 200.326. Effect: With the absence of a compliant policy, the Town is at risk for noncompliance as it relates to federal procurement. Cause: The Town was unaware that the policy was not compliant with Uniform Guidance. Repeat Finding: No Recommendation: We recommend that the Town review its formal procurement policies and make necessary changes to comply with the criteria as set out in 2 CFR sections 200.318 and 200.326. Views of Responsible Officials: Management agrees with this finding.
Finding No. 2024-004 Procurement Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRFP4547 – 2021 Award Period: 3/3/21 – 12/31/24 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: The Town must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (See the definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micropurchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a noncompetitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Condition: The Town purchasing policy does not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326 noted above. Questioned Costs: None Context: Although the Town’s purchasing policies do not include all elements as outlined in 2 CFR sections 200.303 and 200.318 through 200.326, we did not identify transactions where contracts were awarded without proper justification in 7 of 7 procurement transactions tested. Cause: Management was not aware of the procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Effect: The Town is at risk for noncompliance with Federal grants as it relates to procurement. Repeat Finding: No Recommendation: We recommend that the Town update its procurement policies to include all elements identified in 2 CFR sections 200.303 and 200.318 through 200.326. Views of Responsible Officials: Management is working with our current auditors to update the Town’s procurement policies to be in compliance with the Uniform Guidance.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
2024-001 PROCUREMENT, SUSPENSION AND DEBARMENT Grantor: U. S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds CFDA Number: 21.027 Pass-through Entities: CT Department of Social Services CT Department of Children and Families CT Office of Early Childhood CT Office of Victim Services Criteria: When procuring property and services, entities must follow the procurement standards set out at 2 CFR sections 200.318-200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition: The procurement policy in place during fiscal 2024 had not been updated to comply with the requirement of the Uniform Guidance as stated above, and did not specify a micro-purchase or small purchase threshold above which written quotes would be required. A formal written policy for ensuring vendors are not suspended or debarred was not included in the existing policy and therefore this process was not being executed in a consistent manner. Questioned Costs: None. Effect: Certain purchases could be incurred at higher amounts than might have been the case had multiple written quotes been obtained prior to the transaction. However, all purchases tested appeared to be in the normal course of business and costs appeared reasonable. Our testing did not result in any questioned costs. Additionally, the potential existed that a vendor that could either be suspended or debarred could have unknowingly been utilized due to the existing process. Cause: The agency did not timely complete the process to update its policies and procedures to conform with the Uniform Guidance by the expiration of the extended implementation deadline cited in the Uniform Guidance. A new policy was implemented subsequent to year-end. Recommendation: Additional training of relevant staff regarding the new policies and procedures should be considered, especially regarding retention of adequate documentation of bids, quotes, or other procedures including documentation of the checking of vendors against the suspension and debarment lists. Views of Responsible Officials: A new procurement policy, including a process to ensure vendors are not suspended or debarred, was prepared and implemented effective in January 2025. Relevant staff have been and continue to be trained appropriately regarding execution of related procedures to ensure all aspects are being properly performed.
2024 – 009 Special Tests and Provisions – Wage Rate Federal Agency: Department of Interior Federal Program Title: Outdoor Recreation Acquisition, Development and Planning ALN: 15.916 Pass-Through Agency: Arizona State Park Trails Pass-Through Number(s): 04-007-652304 Award Number and Period: 04/18/2022-12/31/24 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), the City of Nogales (City) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 40 USC 3141–3144, 3146, and 3147 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). Per 29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction: 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. This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326). Condition: There was no support provided for the three out of three contractor vendors with construction work noted on their purchase orders. Questioned costs: None. Context: See “Condition.” Cause: Current process and controls are not at the correct precision level to ensure special provisions regarding the Wage Rate compliances are being met. Effect: Ineffective internal controls may result in questioned costs and noncompliance with the terms of the grant award. Repeat Finding: No Recommendation: The City of Nogales should refine its current process and associated controls surrounding the requirements in 40 USC 3141–3144, 3146, and 3147 to ensure they are met. Views of responsible officials: See corrective action plan. Corrective action plan: See corrective action plan.
2024-003 – Written Policies Required by the Uniform Grant Guidance Finding Type. Significant Deficiency in Internal Control over Compliance and Immaterial Noncompliance (Procurement and Suspension and Debarment) Program. COVID-19 State and Local Fiscal Recovery Funds Cluster (CFDA# 21.027); U.S. Department of Treasury; Passed through Lake County. 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. Condition. The District did not have documented procurement standards to comply with 2 CFR sections 200.318 through 200.326. Cause. The District has drafted a policy for these areas in accordance with 2 CFR Part 200, but it has not been finalized. Effect. As a result of this condition, the District did not fully comply with 2 CFR Part 200 applicable to the above noted grant. Questioned Costs. No costs have been questioned as a result of this finding. Recommendation. We recommend that the District develop a policy as soon as practical, but no later than the end of fiscal year 2025, to comply with 2 CFR sections 200.318 through 200.326. View of Responsible Officials. We agree with the recommendation and will develop procedures to comply with the Uniform Guidance applicable to grants Repeat finding. 2023-003
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.
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.
Criteria: Pursuant to 2 CFR 200.326 and Appendix II to 2 CFR Part 200, non-federal entities must include all applicable federal requirements in contracts financed with federal awards, including prevailing wage (Davis-Bacon Act) labor standards when applicable. In addition, Davis-Bacon Act requirements require contractors to submit weekly certified payrolls and statements of compliance, and require the nonfederal entity to monitor and review such payrolls to ensure compliance with prevailing wage requirements. Condition: It was noted that the non-federal entity expended approximately $392,000 representing 100 percent of program expenditures, under a single construction contract subject to prevailing wage requirements. However: 1. The executed construction contract did not include the required prevailing wage (Davis-Bacon) clauses. 2. The contractor did not submit weekly certified payroll reports and statements of compliance to the non-federal entity. Instead, payroll documentation was maintained by the contractor and made available upon request. The entity did not routinely obtain or document review of certified payrolls during the project period. Questioned Costs: None noted. Context: Prevailing wage requirements were not met due to inadequate review of the construction contract and oversight of the construction company. Effect: The entity did not have a process to ensure and enforce compliance with prevailing wage requirements and the construction contract did not include the required prevailing wage clauses. Cause: Management did not have adequate internal controls in place to ensure that required federal labor standard provisions were incorporated into construction contracts and did not establish or enforce procedures requiring the routine submission and documented review of certified payrolls from contractors. Repeat Finding: Not applicable. Recommendation: We recommend that management implement controls to ensure that all construction contracts subject to prevailing wage requirements include the required federal labor standard provisions prior to execution. In addition, management should establish and enforce procedures requiring contractors to submit weekly certified payrolls and should document management’s review of such payrolls to ensure ongoing compliance with prevailing wage requirements. Views of Responsible Officials: Management agrees with the finding and has set up a corrective action plan. Refer to Corrective Action Plan. 2024-003 – Significant Deficiency in Internal Control over Compliance and Other Matters – Special Tests & Provisions Federal Agency: Department of Housing and Urban Development Grant Name: Home Investment Partnerships Program Grant Number: GOL-24-JHF-1 Refer to finding 2024-002. Questioned Costs: None noted. Repeat Finding: Not applicable. Views of Responsible Officials: Management agrees with the finding and has set up a corrective action plan. Refer to Corrective Action Plan.
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.